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4 August, 15:01

Let r=.05 be the reserve rate. Which one of the following is the money multiplier?

a. 10 *.05

b. 1/0.05^2

c. 0.05^2

d. 1/0.05

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Answers (1)
  1. 4 August, 15:27
    0
    The formula for the money multiplier is:

    1 / Reserve rate

    so, the answer would be:

    1/0.05
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