If the currency drain ratio is 0.2 and the desired reserve ratio is 0.03, the money multiplier is
A) 5.22. B) 6.67. C) 0.76. D) 4.46. E) 3.23.
Question 2
An economy has no imports or income taxes. An increase in autonomous expenditure of 40 billion increases equilibrium expenditure by 160 billion. The expenditure multiplier equals
A) 2. B) 8. C) 6. D) 16. E) 4.
