1) The ratio that relates the change in the money supply to a given change in the monetary base is called the
A) money multiplier.
B) required reserve ratio.
C) deposit ratio.
D) discount rate.
2) The formula linking the money supply to the monetary base is
A) M = m/MB.
B) M = m × MB.
C) m = M × MB.
D) MB = M × m.
E) M = m + MB.
3) The variable that reflects the effect on the money supply of changes in factors other than the monetary base is the
A) currency checkable deposits ratio.
B) required reserve ratio.
C) money multiplier.
D) nonborrowed base.
4) An assumption in the model of the money supply process is that the desired levels of currency and excess reserves
A) are given as constants.
B) grow proportionally with checkable deposits.
C) grow proportionally with high powered money.
D) grow proportionally over time.