If the reserve ratio is designated by "r," the amount of deposits a bank can lend out is equal to [D x (1 - r)].

Name: If the reserve ratio is designated by "r," the amount of deposits a bank can lend out is equal to [D x (1 - r)].
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This is known as the deposit multiplier formula, where D is the amount of deposits and (1-r) represents the fraction of deposits that the bank is required to hold as reserves. The remaining fraction (r) can be lent out as loans.

If the Reserve Ratio Is Designated by "R," the Amount