When Would We Expect the Value of the Money Multiplier

question 4

Multiple Choice

When would we expect the value of the money multiplier to be smaller?

• A)If some part of new loans are permanently held as cash.
• B)If the economy was very strong and unemployment rates low.
• C)If banks increased the amount of their excess reserves.
• D)If some part of new loans are permanently held as cash,if the economy was very strong and unemployment rates low,and If banks increased the amount of their excess reserves.
• E)If some part of new loans are permanently held as cash and if banks increased the amount of their excess reserves.