If r is the required reserve ratio,which of the following is the simple money multiplier?

A) r
B) 1/(1 - r)
C) 1 - r
D) 1/r
E) 2r

Question

If r is the required reserve ratio,which of the following is the simple money multiplier?A) rB) 1/(1 - r)C) 1 - rD) 1/rE) 2r

atheer ebrahim · Accepted Answer

Final Answer : D, Explanation :  The simple money multiplier is calculated as 1/r, where r is the required reserve ratio. This multiplier indicates how much the money supply can potentially increase with each deposit into the banking system, given the reserve requirement.

If r is the required reserve ratio,which of the following is the simple money multiplier?

A) r
B) 1/(1 - r)
C) 1 - r
D) 1/r
E) 2r

Definitions

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Learning Objectives

Related questions

If r is the required reserve ratio,which of the following is the simple money multiplier?A) rB) 1/(1 - r) C) 1 - rD) 1/rE) 2r

Definitions

Learning Objectives

Learning Objectives

Related questions

If r is the required reserve ratio,which of the following is the simple money multiplier?

A) r
B) 1/(1 - r)
C) 1 - r
D) 1/r
E) 2r