If the currency to deposit ratio equals.1 and the required reserve ratio is.1, then the money multiplier is

Name: If the currency to deposit ratio equals.1 and the required reserve ratio is.1, then the money multiplier is
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Question

Quizplus · Accepted Answer

The money multiplier formula is 1 / (required reserve ratio + currency to deposit ratio). If both ratios are 0.1, the money multiplier would be 1 / (0.1 + 0.1) = 1 / 0.2 = 5.

If the Currency to Deposit Ratio Equals