Assuming all excess reserves are loaned out, if the reserve ratio is 8 percent, the money multiplier will be equal to

Typically, increasing the difference between the discount and federal funds rates causes

A) an increase in market interest rates. B) high corporate profits. C) no change in interest rates. D) a boom in the economy.

If the actual money multiplier equals the potential money multiplier and if the Federal Reserve wishes to increase the money supply by $500 when the reserve ratio is 10 percent, it should

A) buy $5000 of government bonds. B) sell $5000 of government bonds. C) sell $50 of government bonds. D) buy $50 of government bonds.