If the Ratio of Currency to Transaction Accounts Is 2

question 24

Multiple Choice

If the ratio of currency to transaction accounts is 2, the ratio of nontransaction accounts to transaction accounts is 5, the ratio of retail money-market funds to transaction accounts is 1, the ratio of required reserves to transaction accounts is 0.08, and the ratio of excess reserves to transaction accounts is 0.02, the M2 multiplier is about

• A)1.43.
• B)2.12.
• C)2.83.
• D)4.25.

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Definitions:

Shared Economy

A system in which an owner rents something they are not using, such as a room, a car, or even a service, to a stranger using peer-to-peer services.

Peer-to-Peer Services

A decentralized model where two individuals interact directly with each other, without intermediary third-parties, often facilitated by digital platforms.

Moore's Law

The observation that the number of transistors on integrated circuits doubles approximately every two years, leading to exponential increases in computing power.

High-Level Miniaturization

The process of making devices or components smaller and more efficient while maintaining or enhancing their functionality.