If the reserve ratio is 10 percent,the money multiplier is
A)100.
B)10.
C)9/10.
D)1/10.

Name: If the reserve ratio is 10 percent,the money multiplier is A)100. B)10. C)9/10. D)1/10.
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Question

Quizplus · Accepted Answer

The money multiplier formula is 1/reserve ratio. Therefore, if the reserve ratio is 10%, the money multiplier would be 1/0.1, which equals 10. This means that for every dollar deposited in the bank, the bank can lend out 10 dollars, leading to an expansion of the money supply.

If the Reserve Ratio Is 10 Percent,the Money Multiplier Is