1) A decrease in ________ leads to an equal ________ in the monetary base in the long run.
A) float; increase
B) float; decrease
C) securities; increase
D) securities; decrease
2) An increase in ________ leads to an equal ________ in the monetary base in the long run.
A) float; increase
B) float; decrease
C) securities; increase
D) securities; decrease
3) Suppose a person cashes his payroll check and holds all the funds in the form of currency. Everything else held constant, total reserves in the banking system ________ and the monetary base ________.
A) remain unchanged; increases
B) decrease; increases
C) decrease; remains unchanged
D) decrease; decreases
4) Suppose your payroll check is directly deposited to your checking account. Everything else held constant, total reserves in the banking system ________ and the monetary base ________.
A) remain unchanged; remains unchanged
B) remain unchanged; increases
C) decrease; increases
D) decrease; decreases