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The required reserve ratio is 50%. The money multiplier is

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The required reserve ratio is 50%. The money multiplier is

Question 1.

Suppose the required reserve ratio is 15%. A $10 million deposit will, at most, allow an expansion of the money supply to

▸ $250 million.

▸ $150 million.

▸ $147.5 million.

▸ $66.7 million.

Question 2.

The required reserve ratio is 50%. The money multiplier is

▸ 10.

▸ 5.

▸ 2.5.

▸ 2.

Textbook

Principles of Economics

Edition: 12^th

Authors: Case, Fair, Oster

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