Ask Question
21 June, 05:43

If the required reserve ratio is 20 percent and commercial bankers decide to hold additional excess reserves equal to 5 percent of any newly acquired checkable deposits, then the effective monetary multiplier for the banking system will be:

+2
Answers (1)
  1. 21 June, 06:11
    0
    The effective monetary multiplier that will be used in the banking system given the data provided would be 4. A money multiplier is defined as the output of the reserve dollars the bank produces. To find the multiplier, just take into consideration the amount of deposit and the reserve ratio.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “If the required reserve ratio is 20 percent and commercial bankers decide to hold additional excess reserves equal to 5 percent of any ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers