1. Explain the computation of the monetary multiplier.

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03-12-2020
Business

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1. Explain the computation of the monetary multiplier.

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rorostar10p8wi2c rorostar10p8wi2c · Answer 1 · 2020-12-03T00:33:29+01:00

rorostar10p8wi2c rorostar10p8wi2c

03-12-2020

The money multiplier is defined as the amount of money the banking system generates with each dollar of reserves. ... Thus, the money multiplier can can be calculated as the inverse value of the reserve ratio. That is, if the reserve ratio is R, the money multiplier is 1/R.

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