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What is meant by deposit multiplier? How is deposit multiplier ... | Filo
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SOLVED:The deposit expansion multiplier has been defined as the reciprocal of the reserve requirement. Suppose that banks must hold 10 percent of their deposits in reserve. However, banks also lose 10 percent of their deposits through cash drains out of the banking system. a. What would the deposit expansion multiplier be if there were no cash drain? b. With the cash drain, what is the value of the deposit expansion multiplier?
SOLVED:The deposit expansion multiplier has been defined as the …
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