________ increases the size of the money multiplier.
A) An open market sale of government securities by the Fed
B) An increase in the currency drain ratio
C) A reduction in the desired reserve ratio
D) An open market purchase of government securities by the Fed
E) An increase in the size of open market operations
Question 2
A balance of payments deficit occurs if
A) the demand for a nation's currency exceeds the supply of the currency at the current exchange rate.
B) exports exceed imports.
C) the supply of a nation's currency is equal to the demand for the currency at the current exchange rate.
D) the supply of a nation's currency exceeds the demand for the currency at the current exchange rate.
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