087591,18tcourse id -1405646 1&con; ttps/bbhosted.cuny.edu/webapps/assessment/ta
ID: 1130148 • Letter: 0
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087591,18tcourse id -1405646 1&con; ttps/bbhosted.cuny.edu/webapps/assessment/take/launch,jsp?course assessment id 1 Remaining Time: 1 hour, 31 minutes, 38 seconds. Question Completion Status: Maximum chekable deposit (DD) expansion in the banking system is equal to OA Actual reserves times the money multiplien B Assets times the money multiplier C Excess reserves times the money multipler D. Net-worth times the money multiplier QUESTION 49 Other things equal, an appreciation of the U.S. dollar would A Increase productivity and increase aggregate supply B. Decrease net exports and decrease aggregate demand C Increase the prices of imported resources and decrease aggregate supply D Decrease net exports and decrease fe supply of money QUESTION 50 f the Federal Reserve reduces interest rate it wants A Money supply to decrease B The price leve to decras 10Explanation / Answer
48. Maximum checkable deposit expansion in the banking system is equal to the excess reserve multiply by the money multiplier.
Excess reserves is that part of reserve held by the commercial bank used for lending. By lending the excess reserve, the banking system expands the money supply in the economy, and money multiplier decides the how much the expansion of money supply would happen.
So, the correct answer is an option (C).
49. Others things being equal, an appreciation of U.S. dollar would make U.S goods costlier in the world market, which would lead to a fall in the exports of U.S and decrease in aggregate demand of the U.S. On the other side, appreciation of U.S dollar would make the imports for U.S cheaper, leads to rising imports. Since, export is falling and import is increasing, means there is a decrease in net export (i.e., export minus import).
So, the correct answer is an option (B).
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