indicates that, in the long run, if the money supply increases at a slower rate than real GDP, there will be. in the price level. Select one: O A. The equation of exchange; an increase O B. The quantity theory of money; an increase O C. The equation of exchange; a decrease O D. The quantity theory of money; a decrease

indicates that, in the long run, if the money supply increases at a slower rate than real GDP, there will be. in the price level. Select one: O A. The equation of exchange; an increase O B. The quantity theory of money; an increase O C. The equation of exchange; a decrease O D. The quantity theory of money; a decrease

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.

Question

indicates that, in the long run, if the money supply increases at a slower rate than real GDP,
there will be _ in the price level.
Select one:
O A. The equation of exchange; an increase
O B. The quantity theory of money; an increase
O . The equation of exchange; a decrease
O D. The quantity theory of money; a decrease

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