The Equilibrium Level of GDP Is Always Accompanied by Full

question 45

True/False

The equilibrium level of GDP is always accompanied by full employment and stable prices.

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Definitions:

Required Reserves

The least amount of money that a bank is required to keep on hand as a safeguard for deposits, in compliance with the rules set by central bank authorities.

Demand Deposits

Bank account funds that are available on demand without any delay or penalties, like those in checking accounts.

Excess Reserves

The reserves held by a bank in excess of the minimum reserve requirements set by central banking authorities.

Required Reserves

The minimum amount of reserves that banks are required to hold by law, as a safeguard against bank runs.