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If the Federal Reserve sets the reserve rate to 2%, what is the resulting money multiplier?

If the Federal Reserve sets the reserve rate to 2%, what is the resulting money multiplier?
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If the Federal Reserve sets the reserve rate to 2%, what is the resulting money multiplier?

asked
User Miha Jamsek
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8.5k points

1 Answer

1 vote
Multiplier = 1 / Reserve Ratio.
Multiplier = 1 / 0.02 (2%)
Multiplier = 50.


answered
User Leonardo Deleon
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8.1k points
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