If the reserve ratio is 100 percent, the value of the monetary multiplier is
A) 0.
B) 1.
C) 10.
D) 100.

Name: If the reserve ratio is 100 percent, the value of the monetary multiplier is A) 0. B) 1. C) 10. D) 100.
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Question

Quizplus · Accepted Answer

The monetary multiplier is calculated as 1 divided by the reserve ratio. If the reserve ratio is 100 percent (or 1 as a decimal), the monetary multiplier is 1/1 = 1.

If the Reserve Ratio Is 100 Percent, the Value of the Monetary