In a fractional reserve banking system like the one in the U.S., new deposits are created when
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Question:
In a fractional reserve banking system like the one in the U.S., new deposits are created when
Multiple Choice
a person takes money out of one bank and puts it in another bank.
a bank lends money.
a person takes money out of the banking system and holds it as cash.
All of these options are correct.
a bank borrows dollars from the Federal Reserve.
Suppose a consumption function is given as C = $800 + 0.5YD. The marginal propensity to consume (MPC) is
Multiple Choice
0.5
None of these options are correct
5
$800
0.15
Suppose a bond is issued with an annual interest rate of 6% and a face value of $1,000. You buy the bond for $900. What is the yield of this bond you have purchased?
Multiple Choice
4.67 %
60.00 %
6.67 %
None of these options are correct.
6.00 %
Expert Answer:
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