The Money Multiplier Yielded by the Deposit-Creation Formula Assumes That

question 94

Multiple Choice

The money multiplier yielded by the deposit-creation formula assumes that

• A)banks hold no excess reserves.
• B)banks hold excess reserves.
• C)recipients of loans take some of the proceeds in cash.
• D)recipients of loans do not redeposit their funds in other banks.

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Definitions:

Subsidiaries

Companies that are owned or controlled by another larger parent company, often operating independently but reporting to the parent corporation.

Immigration

The action of coming to live permanently in a foreign country.

Wage Increases

The act of raising the amount of money that employees are paid for their labor, typically as a result of negotiations or economic conditions.

Low-Skilled Labor

Jobs or workers that require minimal specialized skills, training, or education, often characterized by low wages.