The money multiplier _______
A. increases if banks increase their desired reserve ratio
B. increases if the currency drain ratio increases
C. is 1 if the desired reserve ratio equals the currency drain ratio
D. decreases if banks increase their desired reserve ratio
D If banks increase their desired reserve ratio, they will make fewer loans, which decreases the size of the money multiplier.
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The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the Ricardian model is equal to ________ and it ________ as more cloth is produced
A) -MPLF/MPLC; is constant B) -MPLF/MPLC; becomes steeper C) -MPLF/MPLC; becomes flatter D) -MPLC/MPLF; becomes steeper E) -MPLC/MPLF; is constant
If there is a decrease in the expected future profitability of capital,
A) the aggregate demand curve will shift right. B) the aggregate demand curve will shift left. C) the aggregate demand curve will become steeper. D) the aggregate demand curve will be unaffected.