The Market Demand Curve

question 145

Multiple Choice

The market demand curve

• A) shows the relationship between the price of a good and the quantity that all consumers together are willing to buy.
• B) is drawn assuming that variables such as income and tastes are variable.
• C) is drawn assuming that the number of consumers is variable.
• D) is drawn assuming that the selling price is fixed.

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Definitions:

Excess Reserves

Funds that banks hold over and above the legal requirement set by the central bank or banking regulator.

New Reserves

Additional funds or assets that financial institutions or countries set aside to meet future liabilities or unforeseen needs.

Excess Reserves

The amount of reserves that banks hold over the minimum required by the central bank to back deposits.

Money Creation

The process by which the money supply of a country is increased through the activities of its central bank and commercial banking system.