46. The money multiplier is the ratio of:
a) Currency in circulation to reserves held by commercial banks
b) Reserves held by commercial banks to currency in circulation
c) Bank reserves to bank deposits
d) Bank deposits to bank reserves
47. Which of the following factors can affect the money multiplier?
a) Reserve requirement
b) Velocity of money
c) Interest rates
d) All of the above
48. Which of the following is not a function of the central bank?
a) Control the money supply
b) Regulate commercial banks
c) Conduct fiscal policy
d) Maintain financial stability
49. Which of the following is a tool used by the central bank to control the money supply?
a) Open market operations
b) Fiscal policy
c) Exchange rate policy
d) Inflation targeting
50. The money supply is an important indicator of the overall health of the economy.
a) True
b) False
