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The Reserve Bank Purchases $1 Million Government Securities from ANZ

Question 113

Multiple Choice

The Reserve Bank purchases $1 million government securities from ANZ.The desired reserve ratio is 10 per cent,the currency drain ratio is zero,and banks loan all excess reserves.The money multiplier is equal to


A) $1 million.
B) 10.0.
C) 0.10.
D) 100.0.
E) 1.0.

Correct Answer:

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