From a new deposit in a checking account potential money creation is:

Question

Quizplus · Accepted Answer

Potential money creation from a new deposit in a checking account is equal to the initial deposit times the money multiplier. The money multiplier is determined by the reserve requirement ratio, and the higher the ratio, the lower the multiplier. Therefore, the potential money creation can be calculated by multiplying the initial deposit by the money multiplier.

From a New Deposit in a Checking Account Potential Money