Answer:
14.29
Explanation:
Given
Reserve Ratio (R) = 7.00%
Required
Calculate the deposit multiplier (M)
To calculate simple money multiplier (M), we make use of the following formula.
M = 1/R
Where
R represent the reserve ratio
Substitute 7.00% for R
M = 1/7.00%
Convert % to decimals
M = 1/0.07
M = 14.29 ---- Approximated
Hence, the simple money multiplier is 14.29
