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

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

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

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

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

Question

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

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

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

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

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

Quizplus · Accepted Answer

The formula for the money multiplier is (1 + C)/(R + C), where C is the currency drain and R is the desired reserve ratio. Therefore, the correct answer is A, which is (1 + C)/(R + C).

C Is the Currency Drain and R Is the Desired 1+CR+C \frac{1+C}{R+C} R+C1+C​

C Is the Currency Drain and R Is the Desired $\frac{1+C}{R+C}$