If people decide to hold some of their cash and not deposit it, then the:
A) money multiplier overestimates how much money will be created in the economy.
B) money multiplier underestimates how much money will be created in the economy.
C) reserve ratio is not fully functioning, and should be raised.
D) reserve ratio is not fully functioning, and should be lowered.
Correct Answer:
Verified
Q44: If the money multiplier is approximated to
Q45: When banks hold excess reserves the:
A) money
Q46: A bank run is:
A) the situation that
Q47: If the money multiplier is approximated to
Q48: If the reserve ratio is 5 percent,
Q50: Hard money:
A) is the least narrow definition
Q51: The Fed classifies different types of money
Q52: The definition of M1 includes:
A) cash and
Q53: The smaller the reserve ratio the:
A) less
Q54: If the reserve ratio is 20 percent,
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