Question
Asked Jun 11, 2019
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If the reserve ratio requirement in the banking system is 7 percent, what is the money multiplier?

A) 10

B) 12.5

C) 12.95

D) 14.28

E) 14.99

 

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Expert Answer

Step 1

Money multiplier:

Money multiplier can be ca...

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1 Money multiplier = Reserve requirement 0.07 =14.28 Thus, the value of money multiplier is 14.28

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