Answer the indicated question on the basis of the information in Table 14.1.Each question is based on the original balance sheet.

-Based on the information in Table 14.1,the money multiplier is equal to:
A) 1.5.
B) 7.5.
C) 10.0.
D) 11.6

Question

Answer the indicated question on the basis of the information in Table 14.1.Each question is based on the original balance sheet.
 
-Based on the information in Table 14.1,the money multiplier is equal to:
A) 1.5. 
B) 7.5. 
C) 10.0. 
D) 11.6

Quizplus · Accepted Answer

The money multiplier is calculated as the reciprocal of the reserve requirement. If the reserve requirement is 10%, the money multiplier is 1 / 0.10 = 10.0.

Answer the Indicated Question on the Basis of the Information