Exam 9: The Aggregate Demand - Aggregate Supply Model

The money supply in Econland is 1,500,and currency held by the public is equal to bank reserves.The desired reserve-deposit ratio is 0.20.Bank reserves equal

-The table above represents a bank's T-account.Suppose it is the only bank in town and individuals in town hold no cash.Assuming the reserve ratio is 10%,what will be the bank's deposits and reserves at the end of the money creation process?

The measure of the speed at which money changes hands in transactions involving final goods and services is called

After the central bank increases reserves in the banking system through open-market purchases,banks create new deposits through multiple rounds of lending and accepting deposits until the

If the reserve-deposit ratio falls,then

The specialization in production made possible by the use of money to avoid barter is an illustration of the

When a bank makes a loan by crediting the borrower's chequing account balance with an amount equal to the loan,

During hyperinflation,because real GDP and the velocity of money can be assumed to be constant,the rate of ________ equals the rate of ________.

Commercial banks create new money

There is $5,000,000 of currency in Econland,all held by banks as reserves.The public does not hold any currency.If the banks' desired reserve-deposit ratio is 25%,then the money supply equals

In Macroland,there is $1,000,000 in currency that can either be held by the public or used by banks as reserves.If the banks' desired reserve-deposit ratio decreases from 10% to 5% and the public continues to hold the same amount of currency,the money supply in Macroland will

The Bank of Canada is responsible for each of the following EXCEPT

If the actual reserve-deposit ratio equals 8% for a bank,but the desired reserve-deposit ratio for this bank is 10%,the bank should

Monetary policy decisions by the Bank of Canada are implemented through changes in

Growth in the money supply is typically extremely high for countries experiencing periods of

If bank reserves are 200,the public holds 400 in currency,and the desired reserve-deposit ratio is 25%,deposits are ________ and the money supply is ________.

Money serves as a unit of account when

Bank reserves are

In Macroland,currency held by the public is 2000 econs,bank reserves are 300 econs,and the desired reserve-deposit ratio is 15%.If the central bank prints an additional 300 econs and uses this new currency to buy government bonds from the public,the money supply in Macroland will increase from _________ econs to ________ econs,assuming that the public does not wish to change the amount of currency it holds.

Suppose the banking system has $100,000 in outstanding deposits and actual reserves of $35,000.If the required reserve ratio is 10% and individuals hold no cash,the maximum amount the banking system can now add to the money supply is