Let the Reserve Requirement Be 0

question 59

Multiple Choice

Let the reserve requirement be 0.25 and let demand deposits exceed currency by a factor of 2. In that case, an increase of $1 billion in the monetary base increases the money supply by

• A) $2 billion.
• B) $4 billion.
• C) $5 billion.
• D) $2.5 billion.
• E) only $1 billion.

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Definitions:

Labor Shortage

A situation where employers have difficulty filling open positions due to a scarcity of qualified candidates, often affecting certain industries or skill sets.

Temporary Employees

Workers hired on a non-permanent basis to fill short-term needs of the employing organization.

Forecasting Labor Shortage

The process of predicting future shortages in the workforce based on current trends, demographic changes, and economic factors.

Forecasting Labor Surplus

The process of predicting periods during which the number of employees exceeds the number needed by the organization.