The deposit multiplier is given by the formula

A) change in checkable deposits ÷ change in required reserves.
B) change in checkable deposits ÷ change in reserves.
C) change in excess reserves ÷ change in checkable deposits.
D) change in legal reserves ÷ change in excess reserves.


Ans: B) change in checkable deposits ÷ change in reserves.

Economics

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Consider two types of rules that might govern an otherwise unregulated health insurance market: (1) Insurance companies can price-discriminate against the sick and old; (2) insurance companies cannot price discriminate against the sick and old. Explain why, in equilibrium, insurance may be very expensive for the sick and old regardless of which case we find ourselves in.

What will be an ideal response?

Economics

The Laffer curve shows that as tax rates increase

A) initially tax revenues increase, then decrease. B) tax revenues decrease as the incidence of cheating on tax returns increases. C) tax revenues increase as more individuals and businesses have to pay taxes. D) tax revenues remain unchanged.

Economics

The Morrill Act of 1862 established

a. local chapters of the organization that later became known as "Future Farm Leaders of America.". b. state-run agricultural experiment stations. c. "land-grant" colleges that provided agricultural education and research. d. funding for high-school vocational training.

Economics

If the pricing of one firm is partially influenced by what it thinks another firm will do, the two firms are

A) interdependent. B) bundled. C) tied. D) independent.

Economics