The Currency Deposit Ratio,c,is 0

question 83

Multiple Choice

The currency deposit ratio,c,is 0.10.The reserve requirement,rr,is 0.08.The excess reserve ratio,e,is 0.05.What is the size of the money multiplier?

• A)4.70
• B)4.78
• C)4.75
• D)4.00

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Definitions:

Positive Cash Flow

A financial state where the cash inflows in a business exceed the outflows, indicating financial health.

Long-Term Debt

Refers to loans or borrowed funds that are to be repaid over a period longer than one year, typically used for significant investments or to fund major projects.

Asset Base

The aggregate of all the resources owned by a person or organization, which can potentially be used to generate income.

Nonbankable Gaps

Funding or credit needs of a business that cannot be met by traditional bank financing, usually requiring alternative sources of capital.