In the Simple Model of Multiple Deposit Creation in Which

question 68

Multiple Choice

In the simple model of multiple deposit creation in which banks do not hold excess reserves, the increase in chequable deposits equals the product of the change in excess reserves and the ________.

• A) reciprocal of the excess reserve ratio
• B) simple deposit multiplier
• C) reciprocal of the simple deposit multiplier
• D) bank rate

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Definitions:

Variable Cost

Costs that change in proportion to the level of production or sales, such as materials and labor.

Capacity

The maximum amount of work that an organization, system, or machine can produce in a given period.

Multiproduct Break-Even

An analysis used to determine the point at which total revenue equals total costs for multiple products, indicating no profit or loss.

Weighted Contribution

A calculation that assigns different weights or importance to various items or activities based on their contribution to the total.