Question
Assume that the reserve-deposit ratio is 0.23, and the currency-deposit ratio is 0.21. What is the value of the money multiplier?
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Answer to a math question Assume that the reserve-deposit ratio is 0.23, and the currency-deposit ratio is 0.21. What is the value of the money multiplier?
Gene
4.5108 Answers
The money multiplier is given by the formula:
m = \frac{1}{c + r}
where
-c
-r
Given that the reserve-deposit ratio is 0.23 and the currency-deposit ratio is 0.21, we can substitute these values into the formula:
m = \frac{1}{0.21 + 0.23}
m = \frac{1}{0.44}
m = 2.27
\boxed{m = 2.27}
where
-
-
Given that the reserve-deposit ratio is 0.23 and the currency-deposit ratio is 0.21, we can substitute these values into the formula:
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