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Assume That the Desired Reserve Ratio Is 10 Percent and There

question 185

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Assume that the desired reserve ratio is 10 percent and there are no excess reserves in the banking system.Also, suppose that the full-employment, non-inflationary level of GDP in this closed, private economy is $1,200. Assume that the desired reserve ratio is 10 percent and there are no excess reserves in the banking system.Also, suppose that the full-employment, non-inflationary level of GDP in this closed, private economy is $1,200.   Refer to the above information.An interest rate of 2 percent is not sustainable because: A) the demand for bonds in the bond market will fall and the interest rate will fall. B) the demand for bonds in the bond market will rise and the interest rate will fall. C) the supply of bonds in the bond market will decline and the interest rate will rise. D) the supply of bonds in the bond market will rise and the interest rate will rise. Refer to the above information.An interest rate of 2 percent is not sustainable because:

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Definitions:

Superego

In Freud’s structural model, the part of personality that represents society’s values.

Hypnosis

A trance-like state of altered consciousness, usually induced to access deeper levels of the mind, for therapeutic purposes.

Psychological Defense Mechanisms

Strategies used unconsciously by individuals to protect themselves from anxiety and to manage reality and internal conflict.

Distorting Reality

The alteration or manipulation of perceived reality, often to mislead or deceive.

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