The smaller the legal reserve ratio, the larger the simple deposit multiplier. Group of answer choices True False
Added by Kathy B.
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Step 1: The simple deposit multiplier is defined as 1 / reserve ratio (m = 1 / rr). Show more…
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59. Which of the following is true regarding the money multiplier? Select one: a. It is larger if the target reserve ratio is larger. b. It is larger if the target reserve ratio is smaller. c. It will be zero when the target reserve ratio is 100 percent. d. It is the reciprocal of the bank's excess reserves.
Roee S.
A bank currently has $$ 100,000$ in checkable deposits and $$ 15,000$ in actual reserves. If the reserve ratio is 20 percent, the bank has the reserve ratio is 14 percent, the bank has $-$ in money-creating potential. a. $$ 20,000 ;$ S14,000. b. $S 3,000 ; $ 2,100$ c. $-$ 5,000 ; $ 1,000$ d. 55,$000 ; $ 1,000$
Narayan H.
In the money creation process, the simple money multiplier assumes that banks hold no excess reserves. What is the consequence of a bank holding excess reserves? Choose one: A. The simple money multiplier becomes smaller as fewer deposits are made. B. The simple money multiplier becomes smaller as less money is loaned out. C. The simple money multiplier initially increases but then decreases as loans are paid off. D. The simple money multiplier becomes larger as more deposits are made. E. The simple money multiplier becomes larger as more money is loaned out.
Jennifer S.
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