What is the money multiplier

Reference no: EM13184059

In a t-account show the bank balances for a $5000 deposit with a 10% reserve ratio. What is the money multiplier and what is the maximum amount of money created by this deposit.

t-account:

Money Multiplier: _________________

Money created: ____________________

If the reserve ratio is lowered to 8%, what is the money multiplier and what is the maximum amount of money created by the same $5000 deposit?

New money multiplier:_______________

New amount of money created

Reference no: EM13184059

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