If the Desired Reserve Ratio Is Ten Percent, Currency in Circulation

question 19

Multiple Choice

If the desired reserve ratio is ten percent, currency in circulation is $400 billion, and chequable deposits are $1000 billion, then the money multiplier is approximately ________.

• A) 2.5
• B) 2.8
• C) 2.0
• D) 0.7

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Definitions:

Normal People

Individuals who conform to the prevailing norms and standards of society, often considered as average or typical members of a community.

Homosexuals

Individuals who are sexually attracted to people of the same sex.

Propensity

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Romantic partners consisting of a male and a female.