The Larger the Public's Currency Drain from the Banking System

question 535

Multiple Choice

The larger the public's currency drain from the banking system, the

• A) smaller is the monetary base.
• B) smaller is the money multiplier.
• C) larger is the monetary base.
• D) larger is the money multiplier.

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Definitions:

Coupon Bond

A type of bond that pays the holder a regular interest payment (the coupon) until maturity, at which point the principal amount is also repaid.

Yield To Maturity

The total return anticipated on a bond if it is held until the date it matures, including all payments from now until maturity.

Par Value

The face value of a bond or stock, as stated by the issuing company.

Coupon Rate

The annual interest rate paid by a bond, expressed as a percentage of the bond's face value.