During periods of hyperinflation, which of the following is the most likely response of consumers:

a. Save as much as possible.
b. Spend money as fast as possible.
c. Invest as much as possible.
d. Lend money.

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Sonal BahlLv10

23 Jan 2021

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Which of the following best defines economics?
A) Economics teaches how to limit our wants.
B) Economics studies how to choose the best alternative when coping with scarcity.
C) Economics helps you earn as much money as possible.
D) Economics analyzes all aspects of human behavior in general.
E) Economics is concerned with prices and quantities of goods and services, both at the individual level and at the industry level.

lilacbadger994

Suppose Bank A, which faces a reserve requirement of 10 percent, receives a $1,000 deposit from a customer.
a. Assuming that it wishes to hold no excess reserves, determine how much the bank should lend. Show your answer on Bank As balance sheet.
b. Assuming that the loan shown in Bank Aâs balance sheet is redeposited in Bank B, show the changes in Bank Bs balance sheet if it lends out the maximum possible.
c. Repeat this process for three additional banks: C, D, and E.
d. Using the simple money multiplier, calculate the total change in the money supply resulting from the $1,000 initial deposit.
e. Assume Banks A, B, C, D, and E each wish to hold 5 percent excess reserves. How would hold this level of excess reserves affect the total change in the money supply?