The Multiple by Which the Commercial Banking System Can Expand

question 72

Multiple Choice

The multiple by which the commercial banking system can expand the supply of money is equal to:

• A) The ratio of actual reserves to required reserves
• B) The reciprocal of the federal funds rate
• C) The reciprocal of the reserve ratio
• D) The ratio of required reserves to actual reserves

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Definitions:

Overlooked

Failed to be noticed or considered; omitted due to inattention.

Delinquent Balances

Unpaid amounts of money that are past due and have not been settled within the agreed time frame.

Biweekly

occurs or is done every two weeks or twice a week, depending on context.

Credit Balance

Occurs when the amount paid is greater than was due or the account is being paid in advance of service provided.