The _______ tells us how many additional dollars of deposits are created with each additional dollar of reserves.
A. reserve ratio, calculated as 1 divided by the money multiplier,
B. money multiplier, calculated as 1 divided by the reserve ratio,
C. reserve ratio, calculated as 1 minus the money multiplier,
D. money multiplier, calculated as 1 minus the reserve ratio,
Ans: B. money multiplier, calculated as 1 divided by the reserve ratio,
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For a "change in the quantity supplied" but not "a change in supply" to occur, there must be a
A) rightward shift of the supply curve. B) rightward shift of the demand curve. C) leftward shift of the demand curve. D) Both answers B and C are correct.
Both the Federal Reserve System in the United States and the European Central Bank are comprised of geographically dispersed Banks. How might such decentralization contribute to successful monetary policy?
What will be an ideal response?