The Actual Money Multiplier Is Smaller Than the Simple Money

question 232

Multiple Choice

The actual money multiplier is smaller than the simple money multiplier because

• A)the actual multiplier involves M2 rather than M1
• B)cash withdrawals reduce the amount banks can lend out
• C)withdrawals from checkable deposits increase the amount of excess reserves each bank receives
• D)the Fed wants to reduce the money supply
• E)the actual multiplier uses a different measure of reserve requirements

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Definitions:

Position Power

The authority or influence granted to an individual or role by virtue of their positional status within an organizational hierarchy.

Relationship-oriented

A focus on building and maintaining strong interpersonal connections within an organization.

Task-oriented

Focusing primarily on completing tasks efficiently and effectively, usually with specific goals and processes in mind.

LPC

The Least Preferred Co-worker scale, a tool used in Fiedler's contingency model to determine an individual's leadership style based on how they view the least favorable person to work with.