If the Monetary Multiplier Is 6, Then the Reserve Ratio

question 35

Multiple Choice

If the monetary multiplier is 6, then the reserve ratio must be

• A) 1.67.
• B) 0.6.
• C) 0.167.
• D) 0.06.

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Definitions:

Direct Exchange Rate

The price of one currency in terms of another, indicating how much foreign currency can be acquired with a unit of domestic currency.

Canadian Dollar

The currency of Canada, symbolized as CAD, and used across the country.

U.S. Dollar

The official currency of the United States of America, which serves as a primary reserve currency worldwide.

Direct Exchange Rate

The price of one currency in terms of another currency, without requiring conversion to a third currency.