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aleksklad [387]
3 years ago
13

To reach the maximum money​ multiplier, it is assumed that A. there is insufficient loan demand. B. commercial banks keep excess

reserves. C. loans are diverted into circulating currency. D. all loans get redeposited in a checkable and debitable account.
Business
1 answer:
love history [14]3 years ago
6 0

Answer:

D. all loans get redeposited in a checkable and debitable account.

Explanation:

The money multiplier refers to the amount i.e to be generated by the bank so that it could able to generate maximum reserves.

It is to be calculated below:

Money multiplier = 1 ÷ reserve ratio

Also it shows a direct relationship between the supply of money and the reserves

Therefore the appropriate option is d.

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