Everything Else Held Constant,a Decrease in the Excess Reserves Ratio

question 183

Multiple Choice

Everything else held constant,a decrease in the excess reserves ratio causes the M1 money multiplier to ________ and the money supply to ________.

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

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, often derived from the company's profits.

Shares

Shares represent units of ownership interest in a company or financial asset that provide an equal distribution in any profits, if any are declared, in the form of dividends.

Quarterly Dividend

A payment made by a corporation to its shareholders, typically every three months, as a distribution of profits.

Shares

Units of ownership interest in a corporation or financial asset, representing a portion of a company's equity capital.