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The answer to Money multiplier

1. Assuming individuals hold no currency, find out the simple money multiplier using the following reserve ratios:

5%, 10%, 20%, 25%, 50%

2. What is the impact of these ratios on the level of new money that can be created given a $100,000 cash deposit into the banking system?

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M925271

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