In an Economic Model That Uses Income to Predict Monthly

question 13

Multiple Choice

In an economic model that uses income to predict monthly expenditures on entertainment,what is the independent or explanatory variable?

• A)income
• B)monthly expenditures on entertainment
• C)income elasticity
• D)demand for entertainment

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Definitions:

Vault Cash

The physical currency that a bank holds in its vault and automatic teller machines (ATMs) as a part of its reserves.

Required Reserve Ratio

The fraction of deposits that regulators require a bank to hold in reserve and not lend out.

Reserves

Funds or material set aside or saved for future use, often used in the context of central banking as currency holdings or commodities like gold.

Government Bonds

Government Bonds are securities issued by governments to borrow money from investors, promising to pay back the principal amount with interest on specified dates.