If the Money Multiplier Is 3

question 273

Multiple Choice

If the money multiplier is 3.0,a $1,000 increase in the monetary base

• A)increases quantity of money by $3,000.
• B)decreases quantity of money by $3,000.
• C)increases the monetary base by $300.
• D)increases the money multiplier by 3 percent.
• E)decreases the quantity of money by 3 percent.

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Definitions:

Corporation

A legal entity recognized by law as separate from its owners, with rights to own assets, incur liabilities, and conduct business.

Closely Held

A business structure where the ownership is concentrated in a small group of individuals, often family members.

Agency Relationships

A legal and fiduciary relationship between two parties, where one party, the agent, is authorized to act on behalf of another, the principal, in business transactions.

Employer-Employee

A legal and professional relationship between a person who hires others to perform specific tasks and those who are hired.