As a Result of the Fed's Actions During the 2008

question 85

Multiple Choice

As a result of the Fed's actions during the 2008 financial crisis and banks' lending policies,the money multiplier ________ as a direct result of the ________.

• A)fell from about 9 to about 4;surge in banks' desired reserve ratios as they took on less risk
• B)rose from about 4 to about 9;surge in banks' desired reserve ratios as they took on less risk
• C)fell from about 9 to about 4;low risk experienced by banks because of the FDIC increasing their default coverage amounts
• D)rose drastically;consistent decrease in banks' desired reserve ratios as they took on less risk
• E)decreased drastically;consistent decrease in banks' desired reserve ratios as they took on less risk

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Definitions:

Ending Inventory

The final value of goods available for sale at the end of an accounting period, calculated before the start of a new period.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor directly involved in creating the product.

Total Assets

The sum of all current and non-current assets owned by a business, indicating its total resources.

Cost Per Unit

The total expense incurred in manufacturing or acquiring a product divided by the number of units.