Question Description
Short Answer Questions:
- Consider the banking system. ‘Reserves are deposits that banks have received but have not loaned out’.
- Banks must hold reserves. Why? (2 marks)
- What are excess reserves? (1 mark)
- How are excess reserves calculated? (1 mark)
- What is the significance of excess reserves? (2 marks)
- Consider the following statement in the short-run and the long-run: “The quantity theory of money (quantity equation) states than an increase in the money supply will lead to an equiproportionate increase in the price level”. Is this true or false? Explain. (4 marks)
- A book, One World, Ready or Not – The Manic Logic
OR
PayPal Gateway not configured
ORPayPal Gateway not configured