Fact 24.7.1
The Bank of Speedy Creek has chosen the following initial balance sheet: reserves 40 and deposits are 460 Refer to Fact 24.7.1. Suppose all the banks in the banking system have the same desired reserve ratio as the Bank of Speedy Creek. If the currency drain ratio is 32 percent, what is the size of the money multiplier?
a. 3.3
b. 5.0
c. 4.0
d. 2.7
e. 1.25