If total reserves for a bank are $25,000,excess reserves are $5,000,and demand deposits are $100,000,the money multiplier must be

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The money multiplier is calculated as 1 divided by the reserve ratio. The reserve ratio is the required reserves divided by demand deposits. Required reserves are total reserves minus excess reserves, which is $25,000 - $5,000 = $20,000. The reserve ratio is $20,000 / $100,000 = 0.2. Therefore, the money multiplier is 1 / 0.2 = 5.

If Total Reserves for a Bank Are $25,000,excess Reserves Are