the economics of money, banking, and financial markets

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15. 
    

    A simple deposit multiplier equal to one implies a desired reserve ratio equal to ____.
    A) 100 percent
    B) 50 percent
    C) 25 percent
    D) 0 percent
    Answer: A
    Diff: 1 Type: MC Page Ref: 388
    Skill: Applied
    Objective List: 16.4 Utilize a simple model of multiple deposit creation, showing how the
    central bank can control the level of deposits by setting the level of reserves

    
    


16. 
    

    A simple deposit multiplier equal to two implies a desired reserve ratio equal to ____.
    A) 100 percent
    B) 50 percent
    C) 25 percent
    D) 0 percent
    Answer: B
    Diff: 1 Type: MC Page Ref: 388
    Skill: Applied
    Objective List: 16.4 Utilize a simple model of multiple deposit creation, showing how the
    central bank can control the level of deposits by setting the level of reserves

    
    


17. 
    

    A simple deposit multiplier equal to four implies a desired reserve ratio equal to ____.
    A) 100 percent
    B) 50 percent
    C) 25 percent
    D) 0 percent
    Answer: C
    Diff: 1 Type: MC Page Ref: 388
    Skill: Applied
    Objective List: 16.4 Utilize a simple model of multiple deposit creation, showing how the
    central bank can control the level of deposits by setting the level of reserves

    
    


18. 
    

    In the simple deposit expansion model, if the banking system has excess reserves of $75, and
    the desired reserve ratio is 20 percent, the potential expansion of chequable deposits is
    ____.
    A) $75
    B) $750
    C) $37.50
    D) $375
    Answer: D
    Diff: 1 Type: MC Page Ref: 388
    Skill: Applied
    Objective List: 16.4 Utilize a simple model of multiple deposit creation, showing how the
    central bank can control the level of deposits by setting the level of reserves