The required reserve ratio is 20%. What is the maximum possible potential deposit multiplier?
A) 20
B) 5
C) 2
D) 80

Name: The required reserve ratio is 20%. What is the maximum possible potential deposit multiplier? A) 20 B) 5 C) 2 D) 80
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Question

Quizplus · Accepted Answer

The maximum possible potential deposit multiplier is calculated as the reciprocal of the required reserve ratio. Therefore, with a required reserve ratio of 20% (or 0.20), the deposit multiplier is 1 / 0.20 = 5.

The Required Reserve Ratio Is 20