Suppose the reserve requirement is set at 20 percent and excess reserves are $27 million. What is the money multiplier? Multiple Choice 0.05 5.40 5.00 135.00
Suppose the reserve requirement is set at 20 percent and excess reserves are $27 million. What is the money multiplier? Multiple Choice 0.05 5.40 5.00 135.00
Suppose the reserve requirement is set at 20 percent and excess reserves are $27 million. What is the money multiplier? Multiple Choice 0.05 5.40 5.00 135.00
Suppose the reserve requirement is set at 20 percent and excess reserves are $27 million. What is the money multiplier?
Multiple Choice
0.05
5.40
5.00
135.00
Definition Definition Capital reserves held by banks or financial institutions over and above the reserves that are required to be maintained by the regulator toward its liabilities and for internal controls. For commercial banks, excess reserve is the amount over the standard reserve as decided by the central bank. These excess reserve funds are available in the form of cash and cash equivalents.
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