Assume that a bank receives a deposit of $1,000 in cash, puts aside $200 as required reserves, and makes a loan of $800, these transactions imply that: the money multiplier is 10. the money multiplier is 5.

Assume that a bank receives a deposit of $1,000 in cash, puts aside $200 as required reserves, and makes a loan of $800, these transactions imply that: the money multiplier is 10. the money multiplier is 5.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Monetary System

Section: Chapter Questions

Problem 10PA

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Question

Assume that a bank receives a deposit of $1,000 in cash, puts aside $200 as required
reserves, and makes a loan of $800, these transactions imply that:
the money multiplier is 10.
the money multiplier is 5.
the money multiplier is 4.
the money multiplier is 2.
the money multiplier is 2.

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