QuestionWhat is the money multiplier if the reserve rate is set to $5\%$? A. 50 B. 5 C. 20 D. 2

Studdy Solution
Calculate the money multiplier.
$$Money\, Multiplier = \frac{1}{0.05} =20$$The resulting money multiplier when the Federal Reserve sets the reserve rate to% is20. So, the correct answer is C.20.