Chapter 15. The Money Supply and the Money Multiplier
4. Explain why the required reserve ratio, the excess reserve ratio, and the currency ratio are in the denominator of the m 1 and m 2 money multipliers. 5. Explain why the currency, time deposit, and money market mutual fund ratios are in the numerator of the M2 money multiplier. 6. Describe how central banks influence the money supply. 7.
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