If the currency drain ratio is zero, which of the following situations leads to the greatest total increase in the quantity of money?
A) an increase in the monetary base of $250,000 when the desired reserve ratio is 15 percent
B) an increase in the monetary base of $100,000 when the desired reserve ratio is 5 percent
C) an increase in the monetary base of $120,000 when the desired reserve ratio is 10 percent
D) an increase in the monetary base of $100,000 when the desired reserve ratio is 50 percent
E) an increase in the monetary base of $200,000 when the desired reserve ratio is 20 percent
B
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A price increase for pizza will reduce the quantity of pizza demanded because it reduces a buyer's purchasing power. This is called :
a. income effect b. the alternative effect c. the substitution effect d. the normal good effect
A monopolist is able to choose whatever price that it wishes and is only constrained by its greed
a. True b. False Indicate whether the statement is true or false