The Actual Money Multiplier Is Smaller Than the Simple Money

question 78

Multiple Choice

The actual money multiplier is smaller than the simple money multiplier because:

• A)the actual multiplier affects M2 rather than M1.
• B)cash withdrawals reduce the amount banks can lend out.
• C)the actual multiplier affects the amount of excess reserves each bank holds.
• D)the size of the simple multiplier depends on the volume of deposits unlike the actual multiplier.
• E)the actual multiplier uses a different measure of reserve requirements.

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Definitions:

Outcome Study

An investigation designed to assess the results or outcomes of specific interventions or treatments in order to determine their effectiveness.

Inclusion Criteria

The set of guidelines or characteristics required for an individual to participate in a research study or clinical trial.

Causal Relationship

The relationship between two variables where changes in one variable directly cause changes in the other.

Statistically Significant

A determination that the observed results in a study are unlikely to have occurred by chance, indicating a real effect within a predetermined level of confidence.