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Money Multiplier: Definition & Formula

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Which one of the following is the best explanation of the money multiplier?

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1. What data do you need in order to determine the money multiplier?

2. What is a reserve ratio in banking?

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About This Quiz & Worksheet

This quiz and worksheet combo can help you assess your knowledge of the money multiplier and the formula used to calculate it. In order to pass the quiz, you will need to be able to explain the money multiplier and define the reserve ratio.

Quiz & Worksheet Goals

This quiz and worksheet can help you assess your understanding of:

  • The reserve ratio
  • The money multiplier
  • Formula used to find the money multiplier

Skills Practiced

Use these assessment tools to practice the following skills:

  • Information recall - access the knowledge you have gained regarding the reserve ratio
  • Knowledge application - use your knowledge to answer questions about the money multiplier, including data needed to determine it
  • Making connections - use your understanding of the best explanation of the money multiplier

Additional Learning

To learn more about the money multiplier, review the corresponding lesson, Money Multiplier: Definition & Formula. This lesson covers the following objectives:

  • Explain the importance of the money multiplier
  • Identify the formula used to find the money multiplier
  • Examine what the reserve ratio is used for
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