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The required reserve ratio is 12.5%. The money multiplier is

LilyGal

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The required reserve ratio is 12.5%. The money multiplier is

Question 1.

Suppose the required reserve ratio is 25%. A $10 million deposit allows commercial banks to create at most

▸ $2.5 million.

▸ $4 million.

▸ $40 million.

▸ $250 million.

Question 2.

The required reserve ratio is 12.5%. The money multiplier is

▸ 2.5.

▸ 6.

▸ 7.5.

▸ 8.

Textbook

Principles of Economics

Edition: 12^th

Authors: Case, Fair, Oster

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jackjohnson74

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