If M = the quantity of money, m the money multiplier, MB the Monetary Base, C = Currency, D = Deposits, R = Reserves, RR equals required reserves, rD = the required reserve rate and ER = Excess reserves, then ER/D would equal:
A. The amount in excess reserves.
B. The amount in reserves.
C. The excess reserve rate.
D. The money multiplier.
Answer:C
If M = the quantity of money, m the money multiplier, MB the Monetary Base, C = Currency, D = Deposits, R = Reserves, RR equals required reserves, rD = the required reserve rate and ER = Excess reserves, then ER/D would equal:
A. The amount in excess reserves. B. The amount in reserves. C. The excess reserve rate. D. The money multiplier.