IMG_1717.jpg - C but have no effect on real GDP or the velocity of circulation D and decrease real GDP and increase the velocity of circulation E and

IMG_1717.jpg - C but have no effect on real GDP or the...

This preview shows page 1 out of 1 page.

Image of page 1

You've reached the end of your free preview.

Want to read the whole page?

Unformatted text preview: C) but have no effect on real GDP or the velocity of circulation. D) and decrease real GDP and increase the velocity of circulation. E) and decrease the velocity of circulation, but have no effect on real GDP. 12) Consider an economy in which total deposits equal $100,000. Banks choose reserves of $8,000, and households hold $10,000 in currency. What is the money multiplier in this economy? A) 6.00 B) 13.75 C) 5.56 D) 10.80 D = 100 000 R: 8000 C : 10 000 E) 6.11 13) Suppose that the currency drain ratio is 40% and the central bank increases the monetary base by aRTD $560,000. Of the initial amount of loans created, how much does not return to banks because it is kept by households in the form of currency? A) $336,000 B) $520,000 C) $224,000 (D) $160,000 E) $400,000 14) The island nation of Loania has a currency drain ratio of 25 percent and a desired reserve ratio of 15 percent. What increase in the monetary base would be required to increase the quantity of money by $12,500? 4,000 B) $10,000 C) $4,348 D) $3,906 E) $3,125 D = 0125 = 0,15 15) In the foreign exchange market, a change in which of the following will result in a movement along the demand curve for Canadian dollars? A) an increase in imports to Canada B) the Canadian interest rate C) an increase in Canadian exports D) the expected future exchange rate the nominal exchange rate...
View Full Document

  • Fall '19

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors