What is the formula for the money multiplier?
The Fed and Monetary Policy

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History
•
11th - 12th Grade
•
Hard
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11 questions
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1.
FLASHCARD QUESTION
Front
Back
1/Required Reserve Ratio
2.
FLASHCARD QUESTION
Front
If the Fed wants to prevent or end a recession, which of the following policies would be appropriate? raise the discount rate, raise the reserve requirement, buy bonds, sell bonds
Back
buy bonds
3.
FLASHCARD QUESTION
Front
If the Fed needs to follow contractionary monetary policy, what will happen to interest rates?
Back
they will increase
4.
FLASHCARD QUESTION
Front
If the RRR is 10%, the money multiplier will be
Back
10
5.
FLASHCARD QUESTION
Front
If the RRR is 25%, the money multiplier will be
Back
4
6.
FLASHCARD QUESTION
Front
If the RRR is 5%, the money multiplier will be
Back
20
7.
FLASHCARD QUESTION
Front
It is M1 + small time deposits
Back
M2
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