If the required reserve ratio is a uniform 25 percent on all deposits, the money multiplier will be:
a. 4.00.
b. 2.50.
c. 0.40.
d. 0.25.
QUESTION 2Which of the following is in charge of U.S. aid to foreign countries?
a. Agency for International Development (AID).
b. World Bank.
c. International Monetary Fund (IMF).
d. New International Economic Order (NIEO).
QUESTION 3Beginning from a position of long-run equilibrium at the full-employment level of real GDP, the economy's short-run response to a decrease in the aggregate demand curve would be a:
a. movement upward along the short-run aggregate supply curve.
b. movement upward along the long-run aggregate supply curve.
c. downward shift in the short-run aggregate supply curve.
d. movement downward along the short-run aggregate supply curve.
QUESTION 4If your bank faces a 20 percent required reserve ratio and receives a checkable deposit of 4,000 . it can make additional loans worth a maximum of:
a. 800.
b. 3,200.
c. 4,000.
d. 16,000.
e. 20,000.
QUESTION 5A nation's infrastructure includes all of the following except its:
a. market system.
b. educational system.
c. energy system.
d. railroad system.
e. religious system.
QUESTION 6Beginning from full-employment macro equilibrium, increase in government spending will cause real GDP to:
a. increase in the short run.
b. decline in the long run.
c. decline in the short run.
d. increase in the long run.
QUESTION 7Assume all banks in the system started have a 10 percent required reserve ratio and the Fed made a 20,000 open market purchase. The result would be a(n):
a. 200,000 expansion of the money supply.
b. 20,000 expansion of the money supply.
c. 20,000 contraction of the money supply.
d. infinite contraction of the money supply.
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