C/D is the currency drain ratio and R/D is the desired reserve ratio.The money multiplier equals
A)$ \frac{R / D-C / D}{1+R / D} $

B)$ \frac{R / D+C / D}{1+C / D} $

C)$ \frac{1+C / D}{R / D+C / D} $

D)$ \frac{1+R / D}{1+C / D} $

E)$ \frac{1+R / D}{R / D+C / D} $

Question

C/D is the currency drain ratio and R/D is the desired reserve ratio.The money multiplier equals
A)$ \frac{R / D-C / D}{1+R / D} $

B)$ \frac{R / D+C / D}{1+C / D} $

C)$ \frac{1+C / D}{R / D+C / D} $

D)$ \frac{1+R / D}{1+C / D} $

E)$ \frac{1+R / D}{R / D+C / D} $

Quizplus · Accepted Answer

The money multiplier is calculated as the reciprocal of the sum of the currency drain ratio (C/D) and the desired reserve ratio (R/D), which is given by the formula $ \frac{1+C / D}{R / D+C / D} $.

C/D Is the Currency Drain Ratio and R/D Is the Desired