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If the desired reserve ratio of a banking system is 10%, and there is a currency drain of 10%, what is the size of its money multiplier? a) zero b) 5.5 c) 6.7 d) 20 e) 10

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter19: Money Creation

Section: Chapter Questions

Problem 7SQ

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Question

If the desired reserve ratio of a banking system is 10%, and there is a currency drain of 10%, what is the size of its money multiplier?

a) zero

b) 5.5

c) 6.7

d) 20

e) 10

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