„In a binding situation :Select one a. changes in both the price level and in the .Z factors change the interest rate b. only changes in the price level change the .interest rate .c. the interest rate is always zero d. only changes in the Z factors change the

„In a binding situation :Select one a. changes in both the price level and in the .Z factors change the interest rate b. only changes in the price level change the .interest rate .c. the interest rate is always zero d. only changes in the Z factors change the

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter19: The Macroeconomic Perspective

Section: Chapter Questions

Problem 29P: The prime interest rate is the rate that banks charge their best customers. Based on the nominal...

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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

„In a binding situation
:Select one
a. changes in both the price level and in the
.Z factors change the interest rate
b. only changes in the price level change the
.interest rate
.c. the interest rate is always zero
d. only changes in the Z factors change the

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