Author Question: The money multiplier will be smaller when A) bank customers prefer to hold a bigger amount of ... (Read 34 times)

Jramos095 · **on:** Jun 30, 2018

The money multiplier will be smaller when

A) bank customers prefer to hold a bigger amount of their money as cash (instead of in their checking account).
B) when the marginal propensity to save declines.
C) when the reserve ratio decreases.
D) banks prefer to lend out 9 percent of their excess reserves instead of 90 percent.

Question 2

Refer to the figure above. The increase in output due to the same one-unit increase in capital is greatest at point ________.

A) A B) B C) C D) D