If a bank keeps some of its excess reserves, the money multiplier:
a. increases.
b. stays the same.
c. goes to zero.
d. decreases.
e. increases, then decreases.
QUESTION 2A country with a high GDP per capita is classified as an industrially advanced country (IAC).
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3The money multiplier equals:
a. 1 / excess reserves.
b. excess reserves / loans.
c. required reserve ratio / excess reserves.
d. 1 / actual reserves.
e. 1 / required reserve ratio.
QUESTION 4GDP per capita is about 10 times higher in industrially advanced countries (IACs) than in the poorer less-developed countries (LDCs).
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5If the required reserve ratio decreases, the:
a. money multiplier increases.
b. money multiplier decreases.
c. amount of excess reserves the bank has decreases.
d. money multiplier stays the same.
e. amount of excess reserves stays the same.
QUESTION 6GDP per capita provides a reasonably accurate measurement of a country's income distribution.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 7A decrease in nominal incomes causes a leftward shift in the short-run aggregate supply curve (SRAS).
a. True
b. False
Indicate whether the statement is true or false
Quick Reply
