In the simple model of multiple deposit creation in which banks do not hold excess reserves, the increase in chequable deposits equals the product of the change in excess reserves and the ________.

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The simple deposit multiplier is the ratio of the initial increase in excess reserves to the total increase in deposits. In the simple model, banks do not hold excess reserves, so the entire increase in reserves can be used to create new deposits, resulting in the use of the simple deposit multiplier formula.

In the Simple Model of Multiple Deposit Creation in Which