The Simple Deposit Expansion Multiplier Is Really Too Simple for Understanding

question 103

Multiple Choice

The simple deposit expansion multiplier is really too simple for understanding the link between changes in a central bank's balance sheet and the quantity of money in the economy because it:

• A) ignores how central banks could change their balance sheet.
• B) assumes banks hold excess reserves.
• C) ignores the fact people might change their currency holdings.
• D) ignores changes in vault cash.

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Definitions:

Fixed Interval

In the context of reinforcement, it refers to a schedule where rewards are delivered at consistent time intervals after a desired behavior is performed.

Hour

A unit of time equivalent to 60 minutes or 1/24th of a day.

Assembly Line

A manufacturing process in which parts are added to a product in a sequential manner to create a finished product efficiently.

Oral Reprimand

A verbal form of discipline where an individual is verbally warned or criticized for inappropriate behavior or performance.