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Homework answers / question archive / 1)  What is the money multiplier when the reserve requirement is: a) 0

1)  What is the money multiplier when the reserve requirement is: a) 0

Economics

1) 

What is the money multiplier when the reserve requirement is:

a) 0.25

b) 0.05

 

2) Management by exception is a practice whereby managers focus more closely on 
(D areas that are not operating as anticipated O activity-based costing O exceptional decision-making models O a static budget 

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1) 

a) Computation of Money Multiplier when Reserve Requirement is 0.25:

Money Multiplier = 1/Reserve Requirement

= 1/0.25

Money Multiplier = 4

 

 

b) Computation of Money Multiplier when Reserve Requirement is 0.05:

Money Multiplier = 1/Reserve Requirement

= 1/0.05

Money Multiplier = 20

 

2) 

The correct option is 1st "areas that are not operating as anticipated". According to Management by exception strategy the management only focuses on the areas where the results are not as expectations or the areas that are not operating as anticipated.

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