The actual multiplier is often less than what one would calculate using the desired reserve ratio because
A) some loans earn more interest than other loans.
B) people may keep cash and banks may keep excess reserves.
C) there may already have been some excess reserves in the banking system.
D) banks keep some of their desired reserves as vault cash.
Correct Answer:
Verified
Q68: The reason that the commercial banking system
Q69: If the desired reserve requirement is raised,the
Q70: Which of the following actions has no
Q71: The money multiplier is equal to
A)the reserve
Q72: The more excess reserves banks decide to
Q74: Currently,there are $10 million in excess reserves
Q75: The larger the desired reserve ratio,
A)the greater
Q76: Which of the following will limit the
Q77: With a desired reserve ratio of 10
Q78: The actual change in the money supply
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents