If the Reserve-Deposit Ratio Falls,then

question 105

Multiple Choice

If the reserve-deposit ratio falls,then

• A) the ability of commercial banks to create money is greater.
• B) the ability of commercial banks to create money is lower.
• C) the money multiplier is smaller.
• D) the level of required reserves is greater.
• E) the ability of commercial banks to create money is unaffected.

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Definitions:

Total Output

The total quantity of goods or services produced by a firm, industry, or economy in a given period.

Marginal Product

The extra yield generated when one additional unit of a particular input is used, keeping all other inputs unchanged.

Workers

Individuals or employees engaged in any form of labor, either paid or unpaid, within an economy.

Doggie Day Care

A service that provides temporary care and activities for dogs during the day.