Which Statement Does NOT Explain Why the Actual Money Multiplier

question 258

Multiple Choice

Which statement does NOT explain why the actual money multiplier and the potential money multiplier are different?

• A) Banks hold excess reserves during tough economic times.
• B) The interest rate that banks pay on deposits is very low.
• C) Foreign deposits in American banks are not counted in the actual money multiplier.
• D) Foreign consumers, businesses, and governments hold U.S. dollars.

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