Question

if reserve requirement= 25% of deposit,the credit multiplier is​

Answer 1

Answer:

The deposit multiplier, or simple deposit multiplier, refers to the amount of cash that a bank must keep on hand in order to meet the reserve requirement. The maximum amount of checkable deposits, or deposits in demand deposit accounts against which checks may be written, a bank creates through loaning money cannot exceed the amount of the bank's reserves multiplied by the deposit multiplier. The deposit multiplier refers to a percentage of checkable deposits.