If the Required Reserve Ratio Is 5 Percent,currency in Circulation

question 34

Multiple Choice

If the required reserve ratio is 5 percent,currency in circulation is $400 billion,checkable deposits are $800 billion,and excess reserves total $0.8 billion,then the M1 money multiplier is

• A)2.5.
• B)2.72.
• C)2.3.
• D)0.551.

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