Homework Answers
Solution:
Reserve Ratio= (Cash/ Toatal Deposits)*100
Required Reserve Ratio =(5/49)*100
=(0.1020408)*100
=10.2041%
Then,
money multiplier =1/10.2041%
money multiplier=9.8
So,
Maximum amount of deposits to be done
=46* money multiplier
=46*9.8
=450.8
Maximum amount of deposits to be done = 450.8
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