If the target reserve ratio were 100 percent,what would be the value of the money multiplier?

Name: If the target reserve ratio were 100 percent,what would be the value of the money multiplier?
Brand: Quizplus
Rating: 4.8 (38 reviews)

Question

Quizplus · Accepted Answer

If the target reserve ratio were 100 percent, it means that the banks would have to hold all deposits as reserves, leaving no funds available for lending. Therefore, the money multiplier would be 1, as there would be no increase in the money supply through the banking system's lending activities.

If the Target Reserve Ratio Were 100 Percent,what Would Be