Which of the following statements is true ?
A)The simple money multiplier equals the reciprocal of the required reserve ratio.
B)Required reserves is the minimum balance that the Fed requires a bank to hold in vault cash or on deposit with the Fed.
C)The discount rate is the interest rate charged banks for loans from the Fed.
D)Excess reserves equal total reserves minus required reserves.
E)All of these.

Question

Quizplus · Accepted Answer

All the statements are true: A) The simple money multiplier is indeed the reciprocal of the required reserve ratio. B) Required reserves are the minimum balance banks must hold as vault cash or on deposit with the Fed. C) The discount rate is the interest rate for loans from the Fed to banks. D) Excess reserves are total reserves minus required reserves.

Which of the Following Statements Is True