Banks Are Able to Create Money Only When

question 15

Multiple Choice

Banks are able to create money only when

• A)interest rates are above 2%.
• B)the Fed sells U.S.government bonds.
• C)the reserve ratio is 100%.
• D)only a fraction of deposits are held in reserve.

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Reference Line

The portion of the letter that indicates the matter to be discussed, such as "RE: Summary of Cases Applying the Family and Medical Leave Act of 1993". The reference line is placed just below the address block and above the salutation.

E-mail Correspondence

Exchanges of messages via electronic mail, commonly used for personal, professional, and legal communication.

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Lerner Index

A measure of a firm's market power, calculated as the difference between price and marginal cost, divided by price.