The term fractional reserves refers to
A. The fact that reserves are split among many banks.
B. The ratio of required reserves to total loans.
C. The ratio of excess reserves to total loans.
D. Reserves being a small fraction of total transactions account balances.
Answer: D
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Research in the performance of developing nations with exchange rate pegs has shown that:
A) fixed exchange rates are 100% effective in curbing inflation and preventing hyperinflation. B) fixed exchange rates are 100% ineffective in curbing inflation and preventing hyperinflation. C) floating exchange rates are more effective in curbing inflation and preventing hyperinflation. D) fixed exchange rates are neither necessary nor sufficient to curb inflation and prevent hyperinflation.
A rightward shift of a demand curve is called a(n)
a. increase in demand b. decrease in demand c. increase in quantity demanded d. decrease in quantity demanded e. increase in supply