When Part of the Quantity of Money Is Held in Currency

question 245

Multiple Choice

When part of the quantity of money is held in currency, then

• A) a currency drain occurs.
• B) there is a higher level of excess reserves.
• C) the money multiplier will increase in value.
• D) the Fed will find it beneficial to increase the discount rate.

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Definitions:

Red Flag Incident

A warning or indication of a potential problem, danger, or impending trouble, often used in a context where prompt attention is required.

Teletype (TTY) Device

A specially designed telephone that looks very much like a laptop computer with a cradle for the receiver of a traditional telephone. It is used by the hearing impaired to type communications onto a keyboard.

Hearing-Impaired

A term referring to individuals who have partial or total inability to hear.

Relay Service

A communication service for individuals with hearing or speech disabilities, facilitating telephone conversations with the assistance of an operator.