The money multiplier _______. A. increases if banks increase ...

[MirandaLo]

The money multiplier _______.
 
  A. increases if banks increase their desired reserve ratio
  B. increases if the currency drain ratio increases
  C. is 1 if the desired reserve ratio equals the currency drain ratio
  D. decreases if banks increase their desired reserve ratio

Question 2

Each point on a demand curve shows
 
  A) the consumer surplus received from purchasing a given quantity of a product.
  B) the legally determined maximum price that sellers may charge for a given quantity of a product.
  C) the willingness of consumers to purchase a product at different prices.
  D) the economic surplus received from purchasing a given quantity of a product.

[Chocorrol77]

Answer to Question 1

D If banks increase their desired reserve ratio, they will make fewer loans, which decreases the size of the money multiplier.

Answer to Question 2

C

[MirandaLo]

Excellent

[emsimon14]

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