Table 29-7.
-Refer to Table 29-7. Assuming the Bank of Springfield and all other banks have the same reserve ratio, then what is the value of the money multiplier?
A)1.1
B)12.3
C)8.1
D)9.1

Question

Table 29-7. 
-Refer to Table 29-7. Assuming the Bank of Springfield and all other banks have the same reserve ratio, then what is the value of the money multiplier?
A)1.1 
B)12.3 
C)8.1 
D)9.1

Quizplus · Accepted Answer

The money multiplier is calculated as the reciprocal of the reserve ratio. If the reserve ratio is 11%, the money multiplier is 1/0.11, which equals approximately 9.1.

Table 29-7. -Refer to Table 29-7. Assuming the Bank of Springfield and of Springfield