If the required reserve ratio is 20%, then what is the money multiplier?
A)5
B))5
C)2
D))2

Question

Quizplus · Accepted Answer

If the required reserve ratio is 20%, the money multiplier is 5.
Key Takeaway: To figure out this question, you should use the formula for the money multiplier 1/RRR, where RRR is the required reserve ratio. Remember to enter the required reserve ratio as a decimal (not the percentage). So for this question, use: 1/.2 = 5.

If the Required Reserve Ratio Is 20%, Then What Is