If the Required Reserve Ratio Is 10 Percent,currency in Circulation

question 62

Multiple Choice

If the required reserve ratio is 10 percent,currency in circulation is $400 billion,checkable deposits are $1,000 billion,and excess reserves total $1 billion,then the M1 money multiplier is

• A)2.5.
• B)2.8.
• C)2.0.
• D)0.7.

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