If the Fed were to increase the required reserve rate from ten percent to twenty percent, the simple deposit expansion multiplier would:

Name: If the Fed were to increase the required reserve rate from ten percent to twenty percent, the simple deposit expansion multiplier would:
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The simple deposit expansion multiplier is calculated as 1 divided by the required reserve ratio. If the reserve ratio increases from 10% to 20%, the multiplier decreases from 10 (1/0.10) to 5 (1/0.20), effectively halving it.

If the Fed Were to Increase the Required Reserve Rate