Question: 1.Find using the Money multiplier formula: a.The banking system has just experienced an increase in deposits of $50,000. The currency drain ratio is 20 percent

1.Find using the Money multiplier formula:

a.The banking system has just experienced an increase in deposits of $50,000. The currency drain ratio is 20 percent and the desired reserve ratio is 10 percent. What does the money multiplier equal?

b. In a country, banks' desired reserve ratio is 20 percent and there is no currency drain. What does the money multiplier equal?

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