If the Central Bank of Macroland Puts an Additional 1,000

question 70

Multiple Choice

If the Central Bank of Macroland puts an additional 1,000 dollars of currency into the economy, the public deposits all currency into the banking system, and banks have a desired reserve/deposit ratio of 0.10, then the banks will eventually make new loans totaling ________ and the money supply will increase by ________.

• A)$1,000; $1,000
• B)$9,000; $9,000
• C)$9,000; $10,000
• D)$1,000; $9,000

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Definitions:

Obligor

An obligor, in a financial context, refers to the party who is legally bound, or obligated, to make a payment or fulfill a contract term to another party, the obligee.

Assignee

The person to whom contract rights are assigned.

Proper Notice

Adequate information or warning provided in advance, as required by law or agreement, to enable appropriate response or action.

Personal Services

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