The people in an economy have $10 million in money. There is only one bank that all the people deposit their money in and it holds 5% of the deposits as reserves. What is the money multiplier in this economy?
A. 5
B. 1
C. 20
D. 10
Answer:C
The people in an economy have $10 million in money. There is only one bank that all the people deposit their money in and it holds 5% of the deposits as reserves. What is the money multiplier in this economy?
A. 5 B. 1 C. 20 D. 10
Explanation: Type: Multiple Choice