For This Table, Assume That All Banks Follow the Same

question 164

Multiple Choice

For this table, assume that all banks follow the same required reserve ratio requirement. Also assume that the banks are listed in sequential order (thus the loans from the First National Bank become the deposits for the Second National Bank, and the Reference: Ref 15-2 (Table: Multiple Deposit Expansion) For the multiple deposit expansion process described in this table, if all banks hold only the required reserves, what is the money multiplier in this country?

• A) 8
• B) 10
• C) 12.5
• D) 5

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