Essay
Refer to the accompanying consolidated balance sheet for the commercial banking system. Assume the required
reserve ratio is 12 percent. All figures are in billions of dollars. If commercial bankers decide to hold additionalcess reserves equal to 7 percent of any newly acquired deposits, then the relevant monetary multiplier for this
banking system will be
A) 8.33.
B) 6.66.
C) 5.26.
D) 4.76.
Correct Answer:
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