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© 2014 Pearson Canada Inc.$16.9 Appendix 16.2: The M2+ Money Multiplier
The equation that represents M2+ in the model of the money supply process is ____.
A) M2+ = C + D
B) M2+ = C + D + T - MMF
C) M2+ = C + D - T + MMF
D) M2+ = C + D + T + MMF
Answer: D
Diff: 1 Type: MC Page Ref: 16.2A- 1
Skill: Recall
Objective List: Appendix: The M2+ Money Multiplier
The M2+ money multiplier is ____.
A) negatively related to high-powered money
B) positively related to the time deposit ratio
C) positively related to the desired reserve ratio
D) positively related to the excess reserves ratio
Answer: B
Diff: 1 Type: MC Page Ref: 16.2A- 2
Skill: Recall
Objective List: Appendix: The M2+ Money Multiplier
Everything else held constant, an increase in the currency ratio will mean ____ in the
M2+ money multiplier and ____ in the M2+ money supply.
A) an increase; an increase
B) an increase; a decrease
C) a decrease; an increase
D) a decrease; a decrease
Answer: D
Diff: 1 Type: MC Page Ref: 16.2A- 2
Skill: Recall
Objective List: Appendix: The M2+ Money Multiplier
Everything else held constant, a decrease in the currency ratio will mean ____ in the
M2+ money multiplier.
A) an increase
B) a decrease
C) a reversal
D) no change
Answer: A
Diff: 1 Type: MC Page Ref: 16.2A- 2
Skill: Recall
Objective List: Appendix: The M2+ Money Multiplier