Unformatted text preview: operation will equal (ATR x (1/rr)): ADD = ATR x (1/rr) where (1/rr) is the money multiplier. If the reserve requirement ratio is 10 %, then the value of this money multiplier is (1/.10) = 10. Therefore, a $1 increase in total bank reserves will have a $10 impact on demand deposits....
View Full Document
This note was uploaded on 04/10/2012 for the course ECON 101 taught by Professor Gonalez during the Spring '12 term at Université de Bourgogne.
- Spring '12