Question:

Economic-The larger the simple deposit multiplier?? thank you?

by Guest21180  |  earlier

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The larger the simple deposit multiplier,

the larger the required reserve ratio.

the smaller the required reserve ratio.

the smaller the change in the money supply for a given change in deposits.

the less likely the Fed will be to use its monetary policy tools.

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1 ANSWERS


  1. b) the smaller the required reserve ratio.

    Multiplier= 1 /Reserve requirement

    so fall in reserve requirement means higher multiplier.

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