The money multiplier is the
A) fraction of the monetary base that is kept in currency.
B) number of times that the Fed conducts open market operations in a month.
C) factor by which a change in the monetary base is multiplied to give the change in the quantity of money.
D) factor by which a change in the deposits base is multiplied to give the change in the monetary base.
E) proportion by which a change in the quantity of money changes the monetary base.
C
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In an open economy, the law of one price implies that
A) the domestic economy may have a comparative advantage in only half the goods it produces. B) perfect competition holds in all domestic markets. C) purchasing power parity should hold. D) the nominal exchange rate should equal one.
Refer to the information provided in Figure 2.2 below for the economy of Microland to answer the question(s) that follow. Figure 2.2Refer to Figure 2.2. Point B represents a situation of
A. full employment but production inefficiency. B. less than full employment and production inefficiency. C. both full resource employment and production efficiency. D. less than full employment but production efficiency.