of -20, with a reserve requirement of 10 percent, a deposit of $10,000 has exces
ID: 1128054 • Letter: O
Question
of -20, with a reserve requirement of 10 percent, a deposit of $10,000 has excess reserves a $10,000 b. $1,00o $9,000 d. $8,000 -21. Refer to the above problem. What would be the total growth in the money supply? a. $90,000 b. $10,000 $100,000 d. $70,000 22. The Federal Reserve System is divided into how many districts? a. 50 b. 12 C. 10 d. 25 -23. The ultimate goal of monetary policy is a. interest rate stability. b. economic growth with low inflation. c. a stable money supply. d. a low unemployment rate. -24. To increase the money supply, the Federal Reserve could a. increase the discount rate. b. increase the reserve requirement. c. buy bonds. d. sell bonds. 25. Who is the intellectual "father" of monetarism? John Maynard Keynes Milton Friedman Ben Bernanke Paul Krugman .Explanation / Answer
20. The correct answer is: c)
Reason: Excess reserves = 10000 - 10% * 10000
=10000-1000 = $9000.
21. The correct answer is: c)
Reason: here, money multiplier = 1/0.1 =10.
Hence, money growth = 10*10000 = 100000.
22. The correct answer is: b)
Reason: it's a matter of fact that the federal reserve system is divided into 12 districts.
23. The correct answer is: b)
Reason: It is the ultimate goal of every central bank to ensure that the monetary policies understand aim to achieve economic growth with low inflation.
24. The correct answer is: c)
Reason: by performing open market purchase of bonds, the fed can increase the money supply in the economy.
25.The correct answer is: b)
Reason: It is again a matter of fact that Milton Friedman is known as the intellectual father of moneteranism.
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