If the reserve ratio is 20 percent, how much is the money multiplier?
A) 2
B) 4
C) 5
D) 8

Name: If the reserve ratio is 20 percent, how much is the money multiplier? A) 2 B) 4 C) 5 D) 8
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Question

Quizplus · Accepted Answer

The money multiplier is calculated as 1 divided by the reserve ratio. If the reserve ratio is 20 percent (or 0.20), then the money multiplier is 1 / 0.20 = 5.

If the Reserve Ratio Is 20 Percent, How Much Is