If Cash Reserve Ratio is 20%, what will be the value of money multiplier ?
Answer & explanation
Correct answer: option 1
The correct answer is option (1) : 5
Given that CRR is 20 percent (or 0.20 in decimal form)
MM= 1/CRR
= 1/0.2
= 5
If Cash Reserve Ratio is 20%, what will be the value of money multiplier ?
Correct answer: option 1
The correct answer is option (1) : 5
Given that CRR is 20 percent (or 0.20 in decimal form)
MM= 1/CRR
= 1/0.2
= 5