Question

The money multiplier effect shows that when a bank has a lower reserve rate, they are able to generate ___ money

Answer 1

if the bank has lower interest rate more people will come to them so they will generate more money.

Hope that helps

Answer 2

The money multiplier effect shows that when a bank has a lower reserve rate, they are able to generate more money.

Step-by-step explanation:

The monetary multiplier effect corresponds to the relationship between the supply of money and the monetary base existing at a given moment in the economic system. It translates banks' ability to expand the monetary base through credit, generating more money.

In this way, we conclude that when the bank has a lower interest rate, more people will be looking for that bank. In turn, the bank will generate more money.