In a t-account show the bank balances for a $5000 deposit with a 10% reserve ratio. What is the money multiplier and what is the maximum amount of money created by this deposit.
t-account:
Money Multiplier: _________________
Money created: ____________________
If the reserve ratio is lowered to 8%, what is the money multiplier and what is the maximum amount of money created by the same $5000 deposit?
New money multiplier:_______________
New amount of money created