Which of the Following Statements Is True

question 183

Multiple Choice

Which of the following statements is true?

• A) The higher the required reserve ratio, the higher the deposit multiplier.
• B) The higher the excess reserves, the higher the deposit multiplier.
• C) The value of the deposit multiplier falls if economic agents withdraw cash from the banking system.
• D) The deposit multiplier only works to increase money supply, not to decrease money supply.

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Definitions:

Psychometrics

The study dedicated to assessing cognitive functions and abilities.

Empiricism

The philosophical stance that knowledge comes primarily from sensory experience and observation.

Multifactorial Causation

The concept that complex outcomes, such as diseases or behaviors, result from interactions among multiple genetic and environmental factors.

Subjectivity

The quality of being based on or influenced by personal feelings, tastes, or opinions rather than external facts.