If the Reserve Ratio Increased from 10 Percent to 20

question 139

Multiple Choice

If the reserve ratio increased from 10 percent to 20 percent,which of the following would happen to the money multiplier?

• A)It would rise from10 to 20.
• B)It would rise from 5 to 10.
• C)It would fall from 10 to 5.
• D)It would fall from 20 to 5.

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Definitions:

Min

The smallest or least possible amount, quantity, value, or degree.

Pareto Optimal Allocation

A distribution of resources in which it is impossible to make any individual better off without making at least one individual worse off.

Endowed

Provided with a large amount of a resource or quality, often referring to financial grants given to institutions or individuals.

Units

The basic quantity or measurement, such as meter, kilogram, or liter, in terms of which something is considered or measured.