The Demand Deposit Multiplier Is Likely to Be Smaller Than

question 173

Multiple Choice

The demand deposit multiplier is likely to be smaller than 1/RRR if

• A) the public will not want to change its holdings of currency
• B) the public holds no currency
• C) banks want to hold excess reserves
• D) want to hold no excess reserves
• E) banks increase the number of loans they offer to make a larger profit

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Definitions:

Poverty Science

A movement by economists, policy researchers, and business researchers to understand what types of activities and interventions might more effectively alleviate poverty.

Randomized Experiments

An experimental design that uses random assignment of participants to different groups to mitigate selection bias, typically considered the gold standard in research for establishing causality.

Corporate Social Responsibility (CSR)

A business model that helps a company be socially accountable to itself, its stakeholders, and the public.

Long-Term Profitability

The ability of a company to generate a consistent profit over an extended period, indicating financial health and sustainable business practices.