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If required reserve ratio is 10 percent what is the monetary multiplier
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34 votes
34 votes
If required reserve ratio is 10 percent what is the monetary multiplier

User Cimere
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12 votes
12 votes

Answer:

10

Step-by-step explanation:

If the reserve requirement is 10%, then the money supply reserve multiplier is 10 and the money supply should be 10 times reserves. When a reserve requirement is 10%, this also means that a bank can lend 90% of its deposits.

User Allan Jebaraj
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