If the Reserve Ratio Is 100 Percent, the Value of the Monetary

question 199

Multiple Choice

If the reserve ratio is 100 percent, the value of the monetary multiplier is

• A) 0.
• B) 1.
• C) 10.
• D) 100.

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Definitions:

Exports

Goods or services sold by a country to buyers in other countries.

Quotas

Limits set by governments on the quantity of a certain good that can be imported or exported during a specified time frame.

Tariff Revenues

Income that governments earn from imposing taxes on the import and export of goods.

Export Subsidy

An export subsidy is a government policy to encourage export of goods and discourage sale within the domestic market, by providing financial assistance or tax relief.