Everything Else Held Constant,if the Sum of the Required Reserve

question 176

Multiple Choice

Everything else held constant,if the sum of the required reserve ratio and the excess reserve ratio is less than one,an increase in the currency-checkable deposit ratio will mean

• A)an increase in currency in circulation and an increase in the money supply.
• B)an increase in money supply but no change in reserves.
• C)a decrease in the money supply.
• D)an increase in currency in circulation but no change in the money supply.

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Definitions:

Common Stock

Represents ownership shares in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Liability

Any form of financial debt or obligation that an individual or company owes, which is recorded on the balance sheet.

Dividend Growth Model

A valuation method that forecasts the price of a stock by using predicted dividends and discounting them back to present value.

Stock

Portions of equity in a company that signify an ownership interest and a right to its assets and profits.