Why Is the Real-World Deposit Multiplier Smaller Than 1/RR,where RR

question 236

Essay

Why is the real-world deposit multiplier smaller than 1/RR,where RR is the required reserve ratio?

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Definitions:

Myelin sheaths

Myelin sheaths are protective coverings around nerve fibers in the brain and spinal cord, which help increase the speed at which electrical impulses are transmitted along the nerve cells.

Chromosome 21

One of the 23 pairs of chromosomes in humans, with an extra copy of chromosome 21 leading to Down syndrome, a genetic disorder.

Axons

Long, slender projections of nerve cells that transmit electrical impulses away from the neuron's cell body.

Breastfeeding

The process of feeding a baby with milk directly from the mother’s breasts, providing the infant with necessary nutrients for development.