Which of the following is the relationship between the required reserve ratio (RRR) and the demand deposit multiplier?
A) The demand deposit multiplier = 1/RRR
B) The demand deposit multiplier = RRR × change in reserves
C) The demand deposit multiplier = 1/(1 + RRR)
D) RRR = demand deposit multiplier
E) The demand deposit multiplier = 1/(1 - RRR) .
Correct Answer:
Verified
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