1. If a bank has deposits of $10,000 and reserves of $5,000 and if the reserve requirement is 20%, it can make loans of $5,000.
A. True
B. False
2. A decrease in the demand for money would result from:
an increase in the price level.an increase in income.a decrease in real GDP.an increase in nominal GDP.
3. If long-term interest rates are 8% and short-term rates are 3%, the market expects:
short-term rates to remain the same.
short-term rates to rise.
there is no relationship between long-term and short-term rates.
short-term rates to fall.