With a desired reserve ratio of 10 percent,the maximum money multiplier is

Name: With a desired reserve ratio of 10 percent,the maximum money multiplier is
Brand: Quizplus
Rating: 4.8 (50 reviews)

Question

Quizplus · Accepted Answer

The maximum money multiplier is given by 1/reserve ratio. So, with a desired reserve ratio of 10 percent, the maximum money multiplier would be 1/0.10, or 10. This means that the banking system can create up to 10 times the amount of money that the central bank injects into the economy, as long as the reserve ratio remains at 10 percent.

With a Desired Reserve Ratio of 10 Percent,the Maximum Money