If the Monetary Base Fell and the Currency-Deposit Ratio Rose

question 65

Multiple Choice

If the monetary base fell and the currency-deposit ratio rose but the reserve-deposit ratio remained the same, then:

• A) the money supply would fall, but not by as much as it would have fallen if the reserve-deposit ratio had risen.
• B) the money supply would fall, but not by as much as it would have fallen if the reserve-deposit ratio had fallen.
• C) the money supply would fall more than it would have fallen if the reserve-deposit ratio had risen.
• D) it is impossible to be certain whether the money supply would fall or rise in this case.

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Definitions:

Polycentric

An approach where a business adopts local strategies in international markets, recognizing and adapting to differences.

Howard Perlmutter

A scholar known for his work on the concept of ethnocentric, polycentric, and geocentric orientations in international business.

Managerial Attitudes

The predispositions or orientations that managers have towards people, tasks, and situations in the workplace.

Ethnocentric

Holding the belief that one's own culture or ethnicity is superior to others, often resulting in judging other cultures from the perspective of one's own.