If the Desired Reserve Ratio Is R_d, the Simple Deposit

question 214

Multiple Choice

If the desired reserve ratio is R_d, the simple deposit multiplier is defined as

• A) .
• B) .
• C) × change in bank reserves.
• D) × change in bank reserves.

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Definitions:

Agency

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

Agreement

One of the four elements necessary for a contract; consists of an offer made by one party, the offeror, and the acceptance of the offer by another party, the offeree.

Agent

Describes a person or entity authorized to act on behalf of another, known as the principal, in dealings with third parties.

Principal

In a contractual or fiduciary relationship, the principal is the party who authorizes an agent to act on their behalf.