In the economy of panicia, the monetary base is $1,000. people hold a third of their money in the form of currency (and thus two-thirds as bank deposits). banks hold a third of their deposits in reserve. a. what are the reserve–deposit ratio, the currency–deposit ratio, the money multiplier, and the money supply? b. one day, fear about the banking system strikes the population, and people now want to hold half their money in the form of currency. if the central bank does nothing, what is the new money supply? c. if, in the face of this panic, the central bank wants to conduct an open-market operation to keep the money supply at its original level, does it buy or sell government bonds? calculate, in dollars, how much the central bank needs to transact.

Which of the following explains why the government sets a required reserve ratio for private banks? a. to allow the government to control the interest rate charged on loans. b. to prevent banks from printing too much money and causing inflation. c. to make sure banks don't run out of money when customers make withdrawals. d. to enable the regulation of risk levels in the decision process of offering loans. 2b2t

Which of the following is not a consideration when determining your asset allocation

1. all other things equal, according to the law of demand, when the price of a good falls, the demand for the good falls the demand for the good rises the quantity demanded of the good falls the quantity demanded of the good rises 2. when a market is in equilibrium, the quantity of the good that buyers are willing and able to buy exactly equals the quantity that sellers are willing and able to sell cannot be determined is less than the quantity that sellers are willing and able to sell is greater than the quantity that sellers are willing and able to sell 3. which of the following factors does not influence the demand for a good or service? consumer (buyer) income the price of related goods the number of sellers buyer expectations 4. when the number of sellers in a market increases, demand rises supply rises the price rises, all else equal the number of buyers falls