A. Unchanged
B. Larger
C. Smaller
D. Unstable
Related Mcqs:
- Reserve requirements that may be imposed on an economy’s banks by its central bank specify that banks by its central bank specify that banks reserve must be a minimum percentage of them ?
A. assets
B. deposits
C. loans
D. government bonds - If the banks in an economy operate with a reserve ratio of 20 percent then the money multiplier is ?
A. 4
B. 20
C. 25
D. 5 - A bank has excess reserves to lend but is unable to find anyone to borrow the money This will _________ the size of the money multiplier?
A. reduce
B. have no effect on
C. increase
D. double - Assuming there is no government or foreign sector, if the multiplier is 2.5 the MPC is ?
A. 4
B. 25
C. 6
D. 2.5 - Assuming there is no government or foreign sector, if the MPC is 8 the multiplier is ?
A. 5
B. 8
C. 2
D. 1.25 - Assuming there is no government or foreign sector the formula for the multiplier is ?
A. 1/MPS
B. 1/(1+ MPC)
C. 1 – MPC
D. 1/MPC - Micheal Roemer’s three-sector model shows that growth in the booming export sector I- reduces the price of foreign exchange II- retards other sectors’ growth by reducing incentives to export other commodities III- reduces incentives to replace domestic goods for imports IV- raises factor and input prices for non-booming sectors ?
A. I and III only
B. II and III only
C. I, II and III only
D. I, II , III only IV - As the required reserve ratio is decreased the money multiplier ?
A. decreases
B. remain the same, as long as banks hold no excess reserves
C. could either increase or decrease
D. increases - Which function is performed by both commercial banks and central banks ?
A. Acting as bankers to the government
B. Advising the government on monetary policy
C. Dealing in foreign exchange
D. Fixing the main interest rate - As the required reserve ratio is decreased the money multiplier ?
A. could either increase or decrease
B. decrease
C. increase
D. remain the same, as long as bank hold no excess reserves
