If the Reserve Ratio Decreased from 10 Percent to 5

question 5

Multiple Choice

If the reserve ratio decreased from 10 percent to 5 percent, which of the following would happen to the money multiplier?

• A) It would rise from 10 to 20.
• B) It would rise from 5 to 10.
• C) It would fall from 10 to 5.
• D) It would fall from 20 to 5.

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Definitions:

Submerged

This term relates to something being beneath the surface of water or another liquid; it can also metaphorically refer to something being hidden or not visible at the surface level.

Groupthink

A psychological phenomenon that occurs within a group of people, where the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Self-Awareness

The conscious knowledge of one's own character, feelings, motives, and desires.

Group Size

The number of individuals constituting a group, affecting its dynamics and interactions.