Question

Question 1 of 10 Let r= .05 be the reserve rate. Which of the following is the money multiplier? 1 A. 0.052 1 B. O C. 10.0.05 D. 0.052

Answer 1

Given reserve rate is

`r=0.05`

Then, the money multiplier is

`\begin{gathered} \text{Money Multiplier=}(1)/(r) \\ =(1)/(0.05) \end{gathered}`

Hence, the money multiplier is

`(1)/(0.05)`