(Table) Consider the T-account in the table. If the reserve requirement is 20%, then: $$\begin{array} { | l | l | }
\hline \text { Assets } & \text { Liabilities } \
\hline \$ 28,000 \text { (cash) } & \begin{array} { l }
\$ 5,000 \text { (checking account } \
\text { balances) }
\end{array} \
\hline \$ 42,000 \text { (loans) } & \$ 20,000 \text { (loan recipients' checking } \
& \text { account balances) }\
\hline
\end{array}$$
A) the potential money multiplier and the actual money multiplier are the same.
B) the potential money multiplier is 50% larger than the actual money multiplier.
C) the potential money multiplier is 20% smaller than the actual money multiplier.
D) the actual money multiplier is 5.

Question

(Table) Consider the T-account in the table. If the reserve requirement is 20%, then: $$\begin{array} { | l | l | } 
\hline \text { Assets } & \text { Liabilities } \
\hline \$ 28,000 \text { (cash) } & \begin{array} { l } 
\$ 5,000 \text { (checking account } \
\text { balances) }
\end{array} \
\hline \$ 42,000 \text { (loans) } & \$ 20,000 \text { (loan recipients' checking } \
& \text { account balances) }\
\hline 
\end{array}$$
A) the potential money multiplier and the actual money multiplier are the same.
B) the potential money multiplier is 50% larger than the actual money multiplier.
C) the potential money multiplier is 20% smaller than the actual money multiplier.
D) the actual money multiplier is 5.

Quizplus · Accepted Answer

The Answer of (Table) Consider the T-account in the table. If the reserve requirement is 20%, then: $$\begin{array} { | l | l | } 
\hline \text { Assets } & \text { Liabilities } \
\hline \$ 28,000 \text { (cash) } & \begin{array} { l } 
\$ 5,000 \text { (checking account } \
\text { balances) }
\end{array} \
\hline \$ 42,000 \text { (loans) } & \$ 20,000 \text { (loan recipients' checking } \
& \text { account balances) }\
\hline 
\end{array}$$
A) the potential money multiplier and the actual money multiplier are the same.
B) the potential money multiplier is 50% larger than the actual money multiplier.
C) the potential money multiplier is 20% smaller than the actual money multiplier.
D) the actual money multiplier is 5.

(Table) Consider the T-Account in the Table A) the Potential Money Multiplier and the Actual Money Multiplier