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Would having a money supply half its current size make trade half as easy?
Wiki User
∙ 12y ago
Yes.
Wiki User
∙ 12y ago
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Will increase in nominal money supply increase real money supply?
No because real money supply would only increase if the price level doesnt increase or increases at a slower pace than the increase in nominal money supply. This is because the real money supply takes into account the current price level.
Would having a money supply twice as large as it is currently makes trade twice as easy?
An decrease in the required reserve ratio leads to an increase in the money supply
How would bimetallism benefit farmers?
It would increse the money supply.
What effect does an increase in the money supply have on inflation?
An increase in the money supply shifts the money supply curve to the right. If you look on your graph, you will see that an increase in money supply will cause the interest rate to decrease. Here's why: Fed increases money supply-->excess supply of money at the current interest rate -->people buy bonds to get rid of their excess money-->increase in the prices of bonds --> decrease in the interest rate.
What if Banks decide to keep more of their assets as reserves in order to avoid risking a shortage of the required reserve?
It would NOT shrink the money supply, it would just cause the supply of money to grow at a slower pace. So it would decrease the rate of growth of the money supply.
Will increase in nominal money supply increase real money supply?
No because real money supply would only increase if the price level doesnt increase or increases at a slower pace than the increase in nominal money supply. This is because the real money supply takes into account the current price level.
Would having a money supply twice as large as it currently is make trade twice as easy?
An decrease in the required reserve ratio leads to an increase in the money supply
Would having a money supply twice as large as it is currently makes trade twice as easy?
An decrease in the required reserve ratio leads to an increase in the money supply
How would bimetallism benefit farmers?
It would increse the money supply.
What effect does an increase in the money supply have on inflation?
An increase in the money supply shifts the money supply curve to the right. If you look on your graph, you will see that an increase in money supply will cause the interest rate to decrease. Here's why: Fed increases money supply-->excess supply of money at the current interest rate -->people buy bonds to get rid of their excess money-->increase in the prices of bonds --> decrease in the interest rate.
Who would supply money and arm while the CIA would train a force of anti-Castro Cubans?
The United states would supply money and arms.
Who would supply money and arms while the cia would train forces of anti Castro Cubans?
The United states would supply money and arms.
Who would supply money and arms while the Central Intelligence Agency would train a force of anti Castro Cubans?
The United states would supply money and arms.
What if Banks decide to keep more of their assets as reserves in order to avoid risking a shortage of the required reserve?
It would NOT shrink the money supply, it would just cause the supply of money to grow at a slower pace. So it would decrease the rate of growth of the money supply.
Is the main purpose of having money to supply our desires?
No, money provides a standard unit of exchangeeliminating the need for barter in most transactions.
What would fed do to interest rates if it wanted to fight inflation?
Use a monetary policy to decrease the money supply.
Analysis of the types of terms of trade?
the current account and the current account balance are within the terms of trade. if you there is money entering the money supply from a foreign market or someone who has not yet deposited the money into a banking system, that will be a current account. it will be a current account balance, composed of capital account, trade account, and account deficit. this means, if the money is leaving the country.
