If required reserves are expressed by RR; the required reserve rate by rD and deposits by D, the simple deposit expansion multiplier is expressed as:

Name: If required reserves are expressed by RR; the required reserve rate by rD and deposits by D, the simple deposit expansion multiplier is expressed as:
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Question

Quizplus · Accepted Answer

The simple deposit expansion multiplier is calculated as 1/rD, where rD is the required reserve rate. Therefore, option D is the correct choice.

If Required Reserves Are Expressed by RR; the Required Reserve