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Money Creation by Banks · Question 40 of 58

Question 40

MediumOriginal question

The money multiplier is 10. The reserve ratio is

1%Correct answerYour answer10%Correct answerYour answer90%Correct answerYour answer100%Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

r = 1 ÷ multiplier = 1 ÷ 10 = 0.1 = 10%.

Concept: Reserve ratio from the multiplier
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsThe money multiplier

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