QuestionJuly 15, 2025

Learning: Ch 13: Money and the Banking System QUESTIONO The money multiplier for the United States is __ ANSWER approximately 10 between 5 and 6 between 2 and 3 IDONT KNOWYET

Learning: Ch 13: Money and the Banking System QUESTIONO The money multiplier for the United States is __ ANSWER approximately 10 between 5 and 6 between 2 and 3 IDONT KNOWYET
Learning: Ch 13: Money and the Banking System QUESTIONO The money multiplier for the United States is __ ANSWER approximately 10 between 5 and 6 between 2 and 3 IDONT KNOWYET

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Answer

approximately 10 Explanation 1. Define Money Multiplier The money multiplier is defined as the inverse of the reserve ratio. It indicates how much the money supply can increase with each dollar of reserves. 2. Typical Reserve Ratio In the U.S., a typical reserve ratio is around 10%. 3. Calculate Money Multiplier **Money Multiplier = \frac{1}{\text{Reserve Ratio}}**. For a 10% reserve ratio, the multiplier is \frac{1}{0.10} = 10.

Explanation

1. Define Money Multiplier<br /> The money multiplier is defined as the inverse of the reserve ratio. It indicates how much the money supply can increase with each dollar of reserves.<br />2. Typical Reserve Ratio<br /> In the U.S., a typical reserve ratio is around 10%.<br />3. Calculate Money Multiplier<br /> **Money Multiplier = \frac{1}{\text{Reserve Ratio}}**. For a 10% reserve ratio, the multiplier is $\frac{1}{0.10} = 10$.
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