If banks and the private sector decide to hold less cash the money multiplier will be ?

Related Mcqs:

1. 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...

2. 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...

3. 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...

4. 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...

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...

6. 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...

7. 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...

8. 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...

9. 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...

10. 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...