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:

Output

The cumulative quantity of products or services generated by a corporation, sector, or economic system.

Short Run

A period in economics during which at least one factor of production is fixed, influencing decisions on production and costs.

Minimum Price

The lowest price at which a product or service can be sold, often set by law or regulation to protect producers or prevent unfair competition.

Break-Even Point

The point at which total costs and total revenues are equal, resulting in no net loss or gain for a business.