The reciprocal of the reserve requirement is called the:

Name: The reciprocal of the reserve requirement is called the:
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The reciprocal of the reserve requirement is known as the deposit expansion multiplier because it shows how much the money supply can expand based on a given amount of reserves. For example, if the reserve requirement is 10%, the deposit expansion multiplier would be 10 (1/0.1). This means that with $1 of reserves, banks can lend out up to $10, expanding the money supply by $9.

The Reciprocal of the Reserve Requirement Is Called The