Which of the following assumptions made in deriving the simple deposit multiplier is unrealistic?
A) The Fed sets the required reserve ratio.
B) The Fed is able to affect the level of reserves in the banking system.
C) Banks loan out all of their excess reserves.
D) The simple deposit multiplier is equal to 1 divided by the required reserve ratio.
Correct Answer:
Verified
Q51: Suppose that the banking system currency has
Q52: Which of the following statements is correct?
A)The
Q53: If banks do not hold excess reserves,
Q54: When banks borrow on the federal funds
Q55: Which of the following expressions is correct?
A)B
Q57: Suppose a bank with no excess reserves
Q58: During a banking panic
A)the nominal return on
Q59: Suppose that a bank with no excess
Q60: Although open market operations and discount loans
Q61: Which of the following is NOT true
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