Respuesta :
The money multiplier in this economy is 20.
What is money multiplier?
A money multiplier is one of several closely related ratios of commercial bank money to central bank money in monetary economics when applied to fractional reserve banking systems. Given a specific amount of central bank money, it has to do with the maximum amount of commercial bank money that can be produced. The total quantity of loans that commercial banks are permitted to extend is equal to a multiple of the amount of reserves in a fractional reserve banking system with legal reserve requirements. This multiplier, which is also known as an economic multiplier, is equal to the reserve ratio divided by one. The actual ratio of money to central bank money, also known as the money multiplier, is decreased by the non-bank public's retention of some funds as currency.
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