Quiz14 chapter14

Macroeconomics plus MyEconLab plus eBook 1-semester Student Access Kit (6th Edition)

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Quiz This activity contains 15 questions.  Vault cash is equal to $2 million, deposits by depository institutions at the central bank are $3  million, the monetary base is $10 million, and bank deposits are $25 million. Bank reserves are  equal to  $ 3 million. $ 2 million. $ 5 million. $10 million. Vault cash is equal to $2 million, deposits by depository institutions at the central bank are $3  million, the monetary base is $10 million, and bank deposits are $25 million. The money multiplier  is equal to 
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3.0. 5.0. 4.0. 2.5. If the Fed increases the monetary base by $5 million and the money multiplier is 5, M1 will  fall by $25 million. rise by $1 million. fall by $1 million. rise by $25 million.
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Magog banks currently have 1 million dinars and a system of 100% reserve banking. The  government passes a law allowing fractional reserve banking and a minimum reserve-deposit  ratio of 10%. Assuming people hold no currency, after the full process of multiple expansion of  loans and deposits had worked itself out, the nation's money supply would equal 10,000,000 dinars.
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