Given a Cash Reserve Ratio (CRR) being 20%, the value of money multiplier will be ____________.
Answer & explanation
Correct answer: option 4
The Correct answer is option (4) : 5
The formula for the money multiplier is given by :
Money Multiplier = $\frac{1}{CRR}$
So, in this case, it would be $\frac{1}{0.20}=5$