A $1 Increase in High-Powered Money Raises the Quantity of Deposits

question 133

Multiple Choice

A $1 increase in high-powered money raises the quantity of deposits until

• A)all of that increase in high-powered money is held as required reserves.
• B)required reserves fall back down to zero.
• C)required reserves rise back up to zero.
• D)deposits rise by $1.
• E)GDP rises by $1 times the income-determination multiplier.

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Definitions:

Emile Durkheim

A French sociologist, one of the founding figures of sociology, known for his studies on social structure and integration.

Social Conflict Theory

A sociological perspective that frames social behavior as a competition for resources, focusing on the power dynamics and inequality within society.

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A set of principles or tenets which together form the basis of a religion, ideology, or personal philosophy.

Conflict Theory

A sociological perspective that emphasizes the role of power disparities, economic interests, and social conflict in shaping societal structures and relationships.