Suppose the central bank purchases a government bond from a person who deposits the entire amount received from the sale in her bank the money supply will?
Correct answer A. rise by an amount that depends on the bank’s reserve ratio
Tip: press A, B, C or D to answer, and N for the next question.
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More Money, Interest Rates And Output questions
See allWhich one of the following is not true?
Correct answer B. Commercial banks may borrow from and lend to each other and the interest rate at which they do this is called the refinancing rate
Money that a government has required has required to be accepted in settlement of debts is?
Correct answer C. legal tender
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A checking deposit in a bank in considered ____ of that bank?
Correct answer D. a liability
The difference between a bank’s actual reserves and its required reserves is its?
Correct answer C. excess reserves
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