A simple deposit multiplier equal to four implies a desired reserve ratio equal to ________.

Name: A simple deposit multiplier equal to four implies a desired reserve ratio equal to ________.
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Question

Quizplus · Accepted Answer

The desired reserve ratio is the reciprocal of the simple deposit multiplier. In this case, the multiplier is four, so the desired reserve ratio is 1/4 or 0.25, which is equal to 25 percent. Therefore, the best choice is C.

A Simple Deposit Multiplier Equal to Four Implies a Desired