contestada

If the required reserve ratio is 15 percent, the simple deposit multiplier is:_____

a. 1.5.
b. 15.0.
c. 6.67.
d. 3.33.

Respuesta :

MrRoyal

Answer:

C. 6.67

Step-by-step explanation:

Given

Reserve Ratio (RR) = 15%

Required

Determine the simple deposit multiplier

Simple deposit multiplier (M) is calculated by taking the inverse of RR.

The following formula applies:

[tex]M = \frac{1}{RR}[/tex]

Substitute 15% for RR

[tex]M = \frac{1}{15\%}[/tex]

Convert 15% to decimal

[tex]M = \frac{1}{0.15}[/tex]

[tex]M=6.67[/tex]

Hence, option C answers the question

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