If the Monetary Authorities Want to Reduce the Monetary Multiplier

question 80

Multiple Choice

If the monetary authorities want to reduce the monetary multiplier, they should

• A) lower the required reserve ratio.
• B) raise the required reserve ratio.
• C) increase bank reserves.
• D) lower interest rates.

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Definitions:

Market Value

The current market rate at which an asset or service can be traded.

Book Value

The net value of a company's assets minus its liabilities, representing the equity value of a company on its balance sheet.

Reverse Stock Split

A corporate action in which a company reduces the number of its existing shares to increase the share price without changing the total market capitalization.

Market Value

The current trading price for a service or asset in the open market.