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Money Creation by Banks · Question 31 of 58

Question 31

EasyOriginal question

If the reserve ratio is 20%, the money multiplier is

0.2Correct answerYour answer1.25Correct answerYour answer5Correct answerYour answer20Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer C

Correct answer: C

Money multiplier = 1 ÷ 0.2 = 5.

Concept: Calculating the multiplier
Typical timeTypical: 40 s
Your timeYours: —

The rule this testsThe money multiplier

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