The _____ multiplier is equal to _____.

Name: The _____ multiplier is equal to _____.
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Question

Quizplus · Accepted Answer

The money multiplier is equal to 1 divided by the required reserve ratio. This means that for every dollar of reserves held by banks, the money supply can increase by a multiple of the initial dollar. For example, if the required reserve ratio is 10%, then the money multiplier is 1/0.1 = 10. This means that for every $1 of reserves held by banks, the money supply can increase by up to $10.

The _____ Multiplier Is Equal to _____

The _ Multiplier Is Equal to _