Which of the Following Assumptions Made in Deriving the Simple

question 34

Multiple Choice

Which of the following assumptions made in deriving the simple deposit multiplier is unrealistic?

• A)The Fed sets the required reserve ratio.
• B)The Fed is able to affect the level of reserves in the banking system.
• C)Banks loan out all of their excess reserves.
• D)The simple deposit multiplier is equal to 1 divided by the required reserve ratio.

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Definitions:

Color Vision Deficiency

A condition where an individual's ability to see colors, or differences in colors, is impaired.

Retinal Disparity

The slight difference in the relative position of an object as seen by each eye, which is important for depth perception.

Convergence

The act of two or more things coming together, often used in various contexts like technology, media, or eye movements towards a common point.

Color Vision Theory

A theory that explains how the human eye perceives color, typically involving the trichromatic theory and the opponent process theory.