During the Second Half of 2008 the Monetary Base Was

question 80

Multiple Choice

During the second half of 2008 the monetary base was growing far more rapidly than the money supply because

• A) banks were using most of their excess reserves to extend loans and make investments.
• B) the Fed quickly shifted from expansionary monetary policy to restrictive monetary policy.
• C) banks were using their excess reserves to make foreign investments.
• D) banks were maintaining huge excess reserves.

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Definitions:

Tacos

A traditional Mexican dish consisting of a corn or wheat tortilla folded or rolled around a filling such as beef, pork, chicken, seafood, beans, vegetables, and cheese.

Budget Line

The Budget Line is a graphical representation of all possible combinations of two goods that can be purchased with a given income level and prices.

Income Increases

Refers to a rise in the amount of money earned by individuals or households, which can influence their purchasing power and consumption patterns.

Marginal Utility

The supplementary satisfaction or advantage gained upon consuming an extra unit of a good or service.