Multiple Choice
If the monetary base is denoted by B, rr is the ratio of reserves to deposits, and cr is the ratio of currency to deposits, then the money supply is equal to _____ multiplied by B.
A) (rr + 1) / (rr + cr)
B) (cr + 1) / (cr + rr)
C) (rr + cr) / (rr + 1)
D) (rr + cr) / (cr + 1)
Correct Answer:
Verified
Correct Answer:
Verified
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