The reserve ratio-the money multiplier-banks create money

Assignment Help Business Economics

Reference no: EM13977267

Which of the following statements is correct?

a. In the special case of 100-percent-reserve banking, the reserve ratio is 1, the money multiplier is 2, and banks create money.

b. In the special case of 100-percent-reserve banking, the reserve ratio is 1, the money multiplier is 1, and banks do not create money.

c. When the reserve ratio is 0.5, then the money multiplier is 1 and banks do not create money.

d. When the reserve ratio is 0.125, then the money multiplier is 8, and each bank loans $8 for every $1 that it accept in deposits.

Reference no: EM13977267

Questions Cloud

Confronted with a pricing problem : Suppose as a manager of a profitable department store you are confronted with a pricing problem. You have two types of customers: a high-end type that willing to pay a price of $ 25 for a pair of Levis Jeans and a low-end type customer that are willi..

How are the job responsibilities similar and different : How are the job qualifications similar and different among the three? How are the job responsibilities similar and different

How much current is in each resistor : How much current is in each resistor? I1, I2, I3, I4. How much power is delivered to each? P1, P2, P3, P4. Compare the sum of the individual powers with the power delivered to the equivalent resistance for the circuit.]

How many ice cubes at 32 degrees farenheit : A 3 liter pitcher of tea is at a room temperature of 70 degrees Farenheit. You pour 0.2 kg into a Styrofoam cup. How many ice cubes at 32 Degrees farenheit, each 0.025kg, must be added to cool your tea to 0 degrees Celsius?

The reserve ratio-the money multiplier-banks create money : In the special case of 100-percent-reserve banking, the reserve ratio is 1, the money multiplier is 2, and banks create money. In the special case of 100-percent-reserve banking, the reserve ratio is 1, the money multiplier is 1, and banks do not cre..

Describe the service and discuss the pros and cons : For each service, describe the service, discuss the pros and cons, and give the pricing. Provide the URL of each

What time need to strike the rod order to be in equilibrium : A 3 m rod is rotating with an oscillating angular momentum given by sin(2t). If a small rocket with oscillating linear momentum 10-cos(2t) is fired at t = 0, at what time will it need to strike the rod in order to be in equilibrium?

Write the commands to remove all the space character : Write the commands to remove all the space characters stored in the shell variable text. Be sure to assign the result back to text. First use tr to do it and then do the same thing with sed.

Why did the company report a foreign currency loss : What is the company's objective in reporting Normalized Net Income? Do you agree with the company's assessment that it has a 15 percent increase in first-quarter earnings pershare?

User Account

All Pages