Assuming Initially That the Required Reserve Ratio = 15%,the Currency-Deposit

question 141

Multiple Choice

Assuming initially that the required reserve ratio = 15%,the currency-deposit ratio = 40%,and the excess reserve ratio = 5%,a decrease in the excess reserve ratio to 0% causes the M1 money multiplier to ________,everything else held constant.

• A)increase from 2.33 to 2.55
• B)decrease from 2.55 to 2.33
• C)increase from 1.67 to 1.82
• D)decrease from 1.82 to 1.67

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Definitions:

Depressants

Substances that reduce neural activity and slow down the functions of the central nervous system.

Stimulants

Drugs that increase activity in the brain and nervous system, leading to increased alertness, attention, and energy.

Tetrahydrocannabinol

A principal psychoactive constituent of cannabis, responsible for its mind-altering effects.

Psilocybin

A naturally occurring psychedelic compound produced by more than 200 species of mushrooms, known for its ability to induce altered states of consciousness.