Why does the money multiplier measure potential money creation rather than guaranteed money creation?
a. Borrowers may spend all the money they acquire through a loan.
b. The money is not real until it is deposited or spent.
c. Some banks may choose to keep some of their new deposits in their reserves.
d. Borrowers may deposit their loan money into checkable rather than demand deposits.
c. Some banks may choose to keep some of their new deposits in their reserves.
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If the quantity demanded of a good is 100 units and the quantity supplied is 50 units, then the equilibrium quantity will be larger than 100 units
Indicate whether the statement is true or false
If the contribution to output of an additional unit of the variable input exceeds the average contribution of the variable inputs used,
A. the average product will be at its minimum. B. the average contribution must rise. C. the total product will begin to decline. D. the average contribution must fall.