Question 17

If the central bank sells $10,000 in bonds to a bank that has issued $350,000 in loans and is exactly meeting the reserve requirement of 10%, the money supply _____.

will decrease by $10,000

will decrease by $350

will increase by $3,500

will increase by $350,000

Question 18

When the central bank lowers the reserve requirement on deposits, _____.

the money supply increases

the money supply decreases

interest rates cannot change

there will be no response in the money supply

Question 19

If nominal GDP is 1,379 and the money supply is 800, approximately what is velocity?

1.72

-579

579

0.58

Question 20

Suppose that in 2019 1.00 U.S. dollar bought 2.85 Mexican pesos. Then, in 2020 1.00 U.S. dollar bought 2.21 Mexican pesos. From 2019 to 2020 _____.

the U.S. dollar appreciated relative to the Mexican peso

the Mexican peso depreciated against the U.S. dollar

the U.S. dollar depreciated against the Mexican peso

neither currency appreciated or depreciated relative to the other