The money multiplier will be smaller when
A) bank customers prefer to hold a bigger amount of their money as cash (instead of in their checking account).
B) when the marginal propensity to save declines.
C) when the reserve ratio decreases.
D) banks prefer to lend out 9 percent of their excess reserves instead of 90 percent.
A
You might also like to view...
Assume that the reserve—deposit ratio is 0.4. The Federal Reserve carries out open-market operations, purchasing $1,000,000 worth of bonds from banks. This action increased the money supply by $1,750,000. What is the reserve—deposit ratio?
A) 0.2 B) 0.3 C) 0.4 D) 0.5
In the federal funds market diagram, a decrease in the required reserve ratio
A) shifts the demand curve for reserves to the left. B) increases the federal funds rate. C) results in a multiple expansion of deposits, which increases the equilibrium level of reserves held by banks. D) shifts the supply curve for reserves to the right.
If a corporation is sued and loses the lawsuit, its liability to pay
A. is imposed on all stockholders, personally. B. is imposed only on the corporate CEO and the board of directors. C. is limited to the assets held in the corporation’s name. D. is imposed on the bondholders of the corporation.
A worker's marginal revenue product depends upon his average product
a. True b. False Indicate whether the statement is true or false