The Simple Deposit Multiplier Is the Ratio of the Amount

question 144

Multiple Choice

The simple deposit multiplier is the ratio of the amount of

• A)new reserves created by the banks to the amount of deposits.
• B)new reserves created by the banks to the amount of loans.
• C)deposits created by the banks to the amount of new reserves.
• D)loans issued by the banks to deposits created by the banks.

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Definitions:

Surplus Production

The condition where the quantity of goods produced exceeds the quantity of goods consumed.

Farm Products

Goods that are produced through farming activities, including crops, livestock, and dairy products.

Food-Stamp Program

A government assistance program designed to help low-income households purchase food by providing them with food stamps or electronic benefits.

Farm Products

Goods produced through agricultural activities, including crops, livestock, and other items derived from farming.