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MakcuM [25]
3 years ago
8

Assume that banks keep 10% of deposits as reserves. Households hold money such that the currency-deposit ratio is 80%. The money

multiplier is given by:________. a. 1.8 b. 2 c. 1.7 d. None of the other answers e. 1.9
Business
1 answer:
Vladimir [108]3 years ago
6 0

Answer:

b. 2

Explanation:

The computation of the money multiplier is shown below:

Money multiplier is

= (1 + currency deposit) ÷ (reserves + currency deposits)

= (1 + 0.80) ÷ (0.10 + 0.80)

= 1.8  ÷ 0.9

= 2

hence, the money multiplier is 2

Therefore the correct option is b. 2

We simply applied the above formula so that the correct value could come

And, the same is to be considered

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A criticism of the National Bureau of Economic Research's business cycle dating committee is that it: Question 2 options: a) mak
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Company A considers buying company B by means of a tender offer. Company B will accept any offer of A which reflects a fair valu
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Answer:

the price per share in the case when A offers B is $200

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The same is to be considered

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