Question :
71) The money multiplier the
A) fraction of the monetary base : 1227830
71) The money multiplier is the
A) fraction of the monetary base that is kept in currency.
B) factor by which a change in the monetary base is multiplied to give the change in the quantity of money.
C) factor by which a change in the deposits base is multiplied to give the change in the monetary base.
D) proportion by which a change in the quantity of money changes the monetary base.
E) number of times that the Fed conducts open market operations in a month.
Answer: B
Topic: Money multiplier
Skill: Level 1: Definition
Section: Checkpoint 11.4
Status: DMC
72) The number by which a change in the monetary base is multiplied to find the resulting change in the quantity of money is called the
A) desired reserve ratio.
B) money multiplier.
C) currency multiplier.
D) currency drain.
E) open market operation.
Answer: B
Topic: Money multiplier
Skill: Level 1: Definition
Section: Checkpoint 11.4
Status: CT
73) If the money multiplier is 3.0, a $1,000 increase in the monetary base
A) increases quantity of money by $3,000.
B) decreases quantity of money by $3,000.
C) increases the monetary base by $300.
D) increases the money multiplier by 3 percent.
E) decreases the quantity of money by 3 percent.
Answer: A
Topic: Money multiplier
Skill: Level 2: Using definitions
Section: Checkpoint 11.4
Status: CD new
74) C/D is the currency drain ratio and R/D is the desired reserve ratio. The money multiplier equals
A)
B)
C)
D)
E)
Answer: A
Topic: Money multiplier
Skill: Level 4: Applying models
Section: Checkpoint 11.4
Status: Revised
75) The Fed purchases $1 million of U.S. government securities from First Bank. The desired reserve ratio is 10 percent, the currency drain ratio is zero, and banks loan all excess reserves. The money multiplier is equal to
A) 0.10.
B) 1.0.
C) 10.0.
D) 100.0.
E) $1 million.
Answer: C
Topic: Money multiplier
Skill: Level 3: Using models
Section: Checkpoint 11.4
Status: CT
76) Suppose the currency drain ratio is 33.33 percent and the desired reserve ratio is 10 percent. The money multiplier equals
A) 4.27.
B) 3.00.
C) 3.08.
D) 2.50.
E) 6.67.
Answer: C
Topic: Money multiplier
Skill: Level 5: Critical thinking
Section: Checkpoint 11.4
Status: AA
77) If the currency drain ratio is 0.2 and the desired reserve ratio is 0.03, the money multiplier is
A) 0.76.
B) 6.67.
C) 3.23.
D) 4.46.
E) 5.22.
Answer: E
Topic: Money multiplier
Skill: Level 5: Critical thinking
Section: Checkpoint 11.4
Status: DMC
78) Suppose the currency drain ratio is 25 percent and the desired reserve ratio is 20 percent. The money multiplier equals
A) 4.00.
B) 3.00.
C) 2.78.
D) 2.00.
E) 5.42.
Answer: C
Topic: Money multiplier
Skill: Level 5: Critical thinking
Section: Checkpoint 11.4
Status: AA
79) If the currency drain ratio is 30 percent and the desired reserve ratio is 10 percent, the money multiplier is
A) 0.80.
B) 1.25.
C) 3.25.
D) 5.00.
E) 10.0.
Answer: C
Topic: Money multiplier
Skill: Level 5: Critical thinking
Section: Checkpoint 11.4
Status: CT
80) The monetary multiplier is 3 and the change in the monetary base is $100,000. How much will the quantity of money increase?
A) $300,000
B) $200,000
C) $100,000
D) $70,000
E) $33,333
Answer: A
Topic: Money multiplier
Skill: Level 3: Using models
Section: Checkpoint 11.4
Status: AA
