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The Multiple by Which the Chartered Banking System Can Expand

Question 61

Multiple Choice

The multiple by which the chartered banking system can expand the supply of money on the basis of excess reserves:


A) is larger the smaller the desired reserve ratio.
B) is the reciprocal of the bank's actual reserves.
C) is directly or positively related to the size of the desired reserve ratio.
D) will be zero when the desired reserve ratio is 50 percent.

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