Suppose that you lose faith in the banking system and store $1,000 you earned in your attic. If the simple money multiplier is 4, how much money would the banking system create from that $1,000? O $4,000 $250 O $2,500 O $40,000

Suppose that you lose faith in the banking system and store $1,000 you earned in your attic. If the simple money multiplier is 4, how much money would the banking system create from that $1,000? O $4,000 $250 O $2,500 O $40,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Pls select the correct option and exlplain it.

Suppose that you lose faith in the banking system and store $1,000 you earned in your attic. If
the simple money multiplier is 4, how much money would the banking system create from that
$1,000?
O $4,000
O $250
$2,500
$40,000

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