Everything Else Held Constant,an Increase in the Excess Reserve Ratio

question 74

Multiple Choice

Everything else held constant,an increase in the excess reserve ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply.

• A)an increase;an increase
• B)an increase;a decrease
• C)a decrease;an increase
• D)a decrease;a decrease

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Definitions:

Pollution Detection

The process or technology used to identify, monitor, and quantify pollutants in the environment.

Utility Function

A mathematical representation that shows the satisfaction or utility a consumer derives from a set of goods and services.

Pollution Rights

Allowances or permits that grant the holder the right to emit a certain amount of pollutants, used in regulatory systems to control environmental damage.

Quasilinear Preferences

Preferences characterized by a linear utility function in one good, making the marginal rate of substitution dependent only on quantities of other goods.