Given the Bank Reserve-Holding Ratio E and the Quantity of Bank

question 62

Multiple Choice

Given the bank reserve-holding ratio e and the quantity of bank deposits D,the demand by banks for high-powered money is

• A)eD.
• B)e/D.
• C)D/e.
• D)e + D.
• E)D - e.

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Definitions:

Downsloping

Describing a curve or line that moves from a higher to a lower point, often used to illustrate the downward trend in price and quantity relationships in economics.

Marginal Revenue Curve

A graphical representation showing how the revenue from selling one additional unit varies.

Horizontal

A line or direction parallel to the ground or to the bottom edge of a page, representing equality or uniformity in a graphical representation.

Market Price

The current price at which an asset or service can be bought or sold.