Assume that a bank receives a deposit of $1,000 in cash, puts aside $200 as required...
Assume that a bank receives a deposit of $1,000 in cash, puts aside $200 as required reserves, and makes a loan of $800, these transactions imply that:
the money multiplier is 10.
the money multiplier is 5.
the money multiplier is 4.
the money multiplier is 2.
the money multiplier is 2.
Homework Answers
Reserve ratio = reserve maintained / deposit = 200/1000 =0.2 = r
Money multiplier = 1/reserve ratio = 1/r = 1/0.2 = 5
Ans 5
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Assume that a bank receives a deposit of $1,000 in cash, puts
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