Explain why money multiplier differs from simple deposit

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Q. If reserve requirement (rr) is 0.2, what is simple deposit multiplier? If, in addition, currency deposit ratio(c) is 0.05 and excess reserve ratio (e) is 0.15, what is money multiplier? Explain why money multiplier differs from simple deposit multiplier.

Q. At conclusion of World War I, Germany, as a punishment, was obliged to make a large transfer to France in form of reparations. Is it possible that actual reparations may have improved Germany's economic welfare? Discuss

Reference no: EM1372242

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