Answer :
To determine the correct money multiplier given the reserve rate [tex]\( r = 0.07 \)[/tex], we need to understand the formula for the money multiplier.
The money multiplier is calculated as the inverse of the reserve rate. Mathematically, it can be expressed as:
[tex]\[ \text{Money Multiplier} = \frac{1}{\text{Reserve Rate}} \][/tex]
Given the reserve rate [tex]\( r = 0.07 \)[/tex], we can substitute this value into the formula:
[tex]\[ \text{Money Multiplier} = \frac{1}{0.07} \][/tex]
This means that the money multiplier is the value you get when you divide 1 by 0.07. The exact numerical result of this division is a non-repeating decimal:
[tex]\[ \frac{1}{0.07} = 14.285714285714285 \][/tex]
Therefore, the correct option among the provided choices is:
D. [tex]\(\frac{1}{0.07}\)[/tex]
The money multiplier is calculated as the inverse of the reserve rate. Mathematically, it can be expressed as:
[tex]\[ \text{Money Multiplier} = \frac{1}{\text{Reserve Rate}} \][/tex]
Given the reserve rate [tex]\( r = 0.07 \)[/tex], we can substitute this value into the formula:
[tex]\[ \text{Money Multiplier} = \frac{1}{0.07} \][/tex]
This means that the money multiplier is the value you get when you divide 1 by 0.07. The exact numerical result of this division is a non-repeating decimal:
[tex]\[ \frac{1}{0.07} = 14.285714285714285 \][/tex]
Therefore, the correct option among the provided choices is:
D. [tex]\(\frac{1}{0.07}\)[/tex]
