If D equals the maximum amount of new demand-deposit money that can be created by the banking system on the basis of any given amount of excess reserves; E equals the amount of excess reserves; and m is the monetary multiplier, then
A)m = E/D.
B)D = E ×m.
C)D = E − 1/m.
D)D = m/E.

Question

Quizplus · Accepted Answer

The Answer of If D equals the maximum amount of new demand-deposit money that can be created by the banking system on the basis of any given amount of excess reserves; E equals the amount of excess reserves; and m is the monetary multiplier, then
A)m = E/D.
B)D = E ×m.
C)D = E − 1/m.
D)D = m/E.

If D Equals the Maximum Amount of New Demand-Deposit Money