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What is the size of the deposits multiplier

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Reference no: EM131111172

If banks choose to operate with a 5 per cent liquidity ratio and receive an extra £100 million of cash deposits:

(a) What is the size of the deposits multiplier?

(b) How much will total deposits have expanded after the multiplier has worked through?

(c) How much will total credit have expanded?

Reference no: EM131111172

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