Which of the Following Is False?​

question 52

Multiple Choice

Which of the following is false?​

• A)​In a liquidity trap, expansionary monetary policy will tend to increase the excess reserves in the banking system.
• B)​If there are currently excess reserves in the banking system, in a liquidity trap, expansionary monetary policy will lead those excess reserves to be lent out by the banking system
• C)​If there are no changes in the level of excess reserves held in the banking system as a result, both expansionary and contractionary monetary policy can successfully shift the money supply curve
• D)​None of the above; all of the above are true.

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Definitions:

Discount Rate

The rate at which future cash flows are discounted to determine their current value.

Salvage Value

The calculated final value of an asset at the conclusion of its operational period.

Simple Rate of Return

A metric that calculates the percentage of profit or loss on an investment relative to its initial cost.

Operating Expenses

Regular expenses incurred in the day-to-day functioning of a business, excluding the cost of goods sold.