If the Federal Reserve sets the reserve rate to 4%, what is the resulting money multiplier?

Question

asked Oct 13, 2021 210k views

1 Answer

Hewi · Answer 1 · 2021-10-19T04:06:01+0000

Answer:

For this case, what we should do is write the percentage in numerical form.

For this, we divide the percentage number between 100.

We have then that the multiplier is given by:

Answer:

the resulting money multiplier is:

x = 0.04

Explanation: