Question

6. The money multiplier formula shows effects of

A. a cash deposit into banking system on the money supply
B. low interest rates on creditors over a long period
C. federal reserve discount rate reductions on the bond markets
D. a required reserve ratio on excess reserves

I need help on this, Unit 6 Lesson 10, please. CCA

Answer 1

Answer: a cash deposit into banking system on the money supply

The money multiplier refers to the ratio of deposits to the reserves in a certain banking system. The money multiplier formula is caused by a cash deposit in a bank on the money supply.