Answer the next question on the basis of the following table for a commercial bank or thrift:

-Refer to the above table. When the legal reserve ratio is 30 percent, the monetary multiplier is:

Question

Answer the next question on the basis of the following table for a commercial bank or thrift:
 
-Refer to the above table. When the legal reserve ratio is 30 percent, the monetary multiplier is:

Quizplus · Accepted Answer

The monetary multiplier is calculated as 1 divided by the legal reserve ratio. With a reserve ratio of 30% (or 0.30), the multiplier is 1/0.30, which equals 3.33.

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