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If the Fed injects $1 million into the economy by buying T-bills in open market, and the required reserve is 20%, then the money supply will increase a maximum of:
A. $1,000,000
B. $800,000
C. $5,000,000
Answer: C
Explanation:
The deposit expansion multiplier is 1 / 0.2 = 5 (if a = 0). The money supply will increase by
$ 1 million x 5 = $5 million. However, the actual increase of money supply should be lower.
NEW QUESTION: 2
Ihre Datenbank enthält eine Tabelle mit dem Namen Customer, die die Spalten CustomerID und Name enthält.
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D. Option A
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A service is offered to consumers from 9 A.M. to 5 P.M., Monday through Friday. The service experiences downtime from 3 P.M. to 5 P.M. on Wednesday of a given week.
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C. 96.42%
D. 98.33%
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