Economics: Private and Public Choice
16th Edition
ISBN: 9781337642224
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel
Publisher: Cengage Learning US
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Question
Chapter 13, Problem 4CQ
To determine
The impact of change in money supply to reduce poverty.
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"People are poor because they don't have very much money. Yet, central bankers keep money scarce. If people had more money, poverty could be eliminated." Evaluate this view. Do you think it reflects sound economics?
the bank makes small loans (known as microcredit) to the impoverished without requiring collateral. which bank does it belong too?
If many people keep their savings in the piggy banks, it does not help the financial system to function efficiently. *True or False?
Chapter 13 Solutions
Economics: Private and Public Choice
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- Why has the government pumped billions into bank bailouts to prevent them from collapsing?arrow_forwardHow does the central bank control the money supply and interest rates to influence the economy?arrow_forward“When a commercial bank makes loans, it creates money; when loans are repaid, money is destroyed.” Explain.arrow_forward
- Suppose most of your savings are in bonds and, according to an article in the Wall Street Journal, the Fed announces that it will carry out a contractionary monetary policy. What should you do? Should you continue to hold your bonds or should you move your funds into bank accounts?arrow_forwardDo banks create more money, more time, or both? Explain your answer.arrow_forwardIn economic terms, define what money is.arrow_forward
- Why do we permit governments to be in charge of money?arrow_forwardShould determining whether a bank has adequate capital be done internally or externally?arrow_forwardWhat problems an economy may face without money supply? How commercial banks create money in fractional reserve banking system? How a central bank uses many tools to control inflation in an economy?arrow_forward
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