Table 11-2. An economy starts with $10,000 in currency. All of this currency is deposited into a single bank, and the bank then makes loans totaling $9,250. The T-account of the bank is shown below.

-Refer to Table 11-2. If all banks in the economy have the same reserve ratio as this bank, then the value of the economy's money multiplier is
A) 1.33.
B) 10.00.
C) 10.81.
D) 13.33.

Question

Table 11-2. An economy starts with $10,000 in currency. All of this currency is deposited into a single bank, and the bank then makes loans totaling $9,250. The T-account of the bank is shown below.
 
-Refer to Table 11-2. If all banks in the economy have the same reserve ratio as this bank, then the value of the economy's money multiplier is
A) 1.33. 
B) 10.00. 
C) 10.81. 
D) 13.33.

Quizplus · Accepted Answer

The Answer of Table 11-2. An economy starts with $10,000 in currency. All of this currency is deposited into a single bank, and the bank then makes loans totaling $9,250. The T-account of the bank is shown below.
 
-Refer to Table 11-2. If all banks in the economy have the same reserve ratio as this bank, then the value of the economy's money multiplier is
A) 1.33. 
B) 10.00. 
C) 10.81. 
D) 13.33.