Multiple Choice
If D equals the maximum amount of new demand-deposit money that can be created by the banking system on the basis of any given amount of excess reserves; E equals the amount of excess reserves; and m is the money multiplier, then we can say that:
A) m = E/D.
B) D = E * m.
C) D = E - 1/m.
D) D = m/E.
Correct Answer:
Verified
Correct Answer:
Verified
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