Question

The multiplier is defined as

• change in GDP − initial change in spending.

• change in GDP/initial change in spending.

• 1 − MPS.

• change in GDP × initial change in spending.

What is a bank run?

• The movement of a check through the banking process.

• Believing a bank is insolvent, depositors run to the bank to withdraw their money.

• None of the above is correct.

• A sequence of good luck arising from a bank investing in mortgage-backed securities.

• A fund raiser sponsored by banks for a charitable cause.

Answer 1