In an Economy in Which Individuals Do Not Hold Currency

question 58

Multiple Choice

In an economy in which individuals do not hold currency , which of the following expressions represents the money multiplier?

• A) [c+8(1- c)].
• B) 1/[c+8(1- c)] .
• C) 1/(1- c).
• D) 1/8.
• E) 1/c8.

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Definitions:

Marginal Social Benefit

The additional benefit to society resulting from the production or consumption of one more unit of a good or service.

Pollution

The contamination of the natural environment by harmful substances or energies, often resulting from human activities.

Efficient

The condition in which resources are allocated in a way that maximizes the net benefit to society or achieves an optimal outcome where no one can be made better off without making someone else worse off.

Beneficiaries

Individuals or groups that receive benefits or advantages from something, especially from a trust, insurance policy, or will.