The money-creation formula is oversimplified because it assumes that
A. every recipient of a bank loan will redeposit the proceeds in another bank.
B. loan recipients will not take any of the proceeds in cash.
C. every bank lends out all excess reserves.
D. All of these responses are correct.
Answer: D
Economics
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The underlying principles behind the slashing of marginal tax rates in 1964 were Monetarist
a. True b. False
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Under the adaptive expectations hypothesis, which of the following is the most likely long-run effect of a move to a more expansionary monetary policy?
a. higher prices and no change in real output b. higher prices and expansion in real output c. no change in prices but an expansion in real output d. no change in either prices or real output
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