If the Volume of Discount Loans Increases by $2 Billion

question 56

Multiple Choice

If the volume of discount loans increases by $2 billion, the monetary base will increase by

• A)$2 billion times the money multiplier.
• B)$2 billion divided by the money multiplier.
• C)$2 billion.
• D)an amount that can be determined only if the ratio of excess reserves to checkable deposits is known.

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Definitions:

Approximately Normal

Describing a distribution that resembles the bell-shaped curve of a normal distribution, especially when certain statistical conditions are met.

Population Proportion

The ratio of members in a group or category to the total population under study.

Alternative Hypothesis

A hypothesis that proposes a specific relationship or difference between variables, contrary to the null hypothesis.

Population Proportion

The fraction or percentage of a total population that possesses a particular characteristic.