When Currency Is Equal to $200 Billion and Reserves Are

question 163

Multiple Choice

When currency is equal to $200 billion and reserves are equal to $350 billion, and we know that the money multiplier is equal to 1.5, then the money supply will be equal to ________.

• A) $825 billion
• B) $225 billion
• C) $366.66 billion
• D) $500 billion

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Definitions:

Blank Slates

A theory suggesting that individuals are born without built-in mental content, and all knowledge comes from experience or perception.

Synonymous

Having the same, or nearly the same, meaning as another word or phrase in the same language.

Quantitative

Pertaining to, measuring, or measured by the quantity of something rather than its quality.

Quality

The standard of something as measured against other things of a similar kind; the degree of excellence of something.