If the Money Multiplier Is 3

question 69

Multiple Choice

If the money multiplier is 3.0, a $1,000 increase in the monetary base

• A) increases the quantity of money by $3,000.
• B) decreases the quantity of money by $3,000.
• C) increases the money multiplier by 3 per cent.
• D) decreases the quantity of money by 3 per cent.
• E) increases the monetary base by $300.

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Definitions:

Reinforcement Theory

A theory that suggests behavior is influenced by its consequences, with rewards encouraging the behavior's recurrence.

Equity Theory

A concept in social psychology that explains how individuals perceive fairness in distribution of resources in interpersonal relationships.

Goal-Setting Theory

A psychological theory suggesting that establishing specific, measurable, achievable, relevant, and time-bound goals can significantly influence motivation and enhance performance.

Negative Reinforcement

A behavioral psychology term describing the strengthening of a behavior because a negative condition is stopped or avoided.