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Question
The deposit multiplier formula is ______.
Options
Increase in Deposits = RR × ΔD
Increase in Deposits = (1/RR) × ΔD
Increase in Deposits = ΔD / RR
Increase in Deposits = RR / ΔD
MCQ
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Solution
The deposit multiplier formula is Increase in Deposits = (1/RR) × ΔD.
Explanation:
It shows total new deposits = initial deposit change divided by reserve ratio (1/RR × ΔD).
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