What Is the Simple Money Multiplier Equal To

question 72

Multiple Choice

What is the simple money multiplier equal to?  

• A) the reciprocal of the desired reserve ratio 
• B) a multiple of the desired reserve ratio 
• C) desired reserves plus excess reserves 
• D) total reserves minus required reserves

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Definitions:

Strong-form Efficient

A hypothesis suggesting that all information, both public and private, is reflected in a stock's price, making it impossible to consistently achieve higher returns.

Variance

A measure of the dispersion of a set of data points around their mean, often used in finance as a measure of the risk associated with a particular investment.

Average Squared Difference

A statistical measure calculated by averaging the squares of differences from a mean, often used in variance calculations.

Actual Return

The real profit or loss generated on an investment over a specified period, taking into account both capital gains and income received from the investment.