Based on our understanding of the IS-LM model that takes into account dynamics, we know that an increase in the money supply will cause
A) an immediate increase in i and no initial change in Y.
B) an immediate decrease in i and no initial change in Y.
C) a gradual decrease in i and gradual increase in Y.
D) none of the above
B
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Which of the following financial institutions does NOT have to meet minimum reserve ratios?
i. the Fed ii. commercial banks iii. credit unions A) i only B) ii only C) iii only D) ii and iii E) i, ii, and iii
With of the following is true with regard to leverage? a. The U.S.banking system uses very little leverage to ensure the safety of the banking system. b. Leverage in the banking system increases its potential for profits, but no losses
c. Losses borne by highly leveraged banks can have a ripple effect throughout the financial system. d. All of the above are true