Consider an economy that currently has a monetary base of $3 trillion, the required reserve ratio is 10% of deposits, banks hold an additional 65% of deposits in excess reserves and the currency-to-deposit ratio is 30%. What is the money multiplier for this economy?

Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter13: The Federal Reserve System
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Consider an economy that currently has a monetary base of $3 trillion, the required reserve ratio is 10% of deposits, banks hold an additional 65% of deposits in excess reserves and the currency-to-deposit ratio is 30%. What is the money multiplier for this economy?

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