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When Would We Expect the Value of the Money Multiplier

Question 4

Multiple Choice

When would we expect the value of the money multiplier to be smaller?


A) If some part of new loans are permanently held as cash.
B) If the economy was very strong and unemployment rates low.
C) If banks increased the amount of their excess reserves.
D) If some part of new loans are permanently held as cash,if the economy was very strong and unemployment rates low,and If banks increased the amount of their excess reserves.
E) If some part of new loans are permanently held as cash and if banks increased the amount of their excess reserves.

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