Answer :
To determine the money multiplier given a reserve rate [tex]\( r \)[/tex], we use the formula:
[tex]\[ \text{Money Multiplier} = \frac{1}{\text{Reserve Rate}} \][/tex]
Given the reserve rate [tex]\( r = 0.05 \)[/tex], we substitute this value into the formula:
[tex]\[ \text{Money Multiplier} = \frac{1}{0.05} \][/tex]
Now, performing the division:
[tex]\[ \frac{1}{0.05} = 20.0 \][/tex]
Therefore, the correct option that corresponds to the money multiplier is:
[tex]\[ \boxed{D. \frac{1}{0.05}} \][/tex]
Thus, the money multiplier for a reserve rate of [tex]\( 0.05 \)[/tex] is 20.0.
[tex]\[ \text{Money Multiplier} = \frac{1}{\text{Reserve Rate}} \][/tex]
Given the reserve rate [tex]\( r = 0.05 \)[/tex], we substitute this value into the formula:
[tex]\[ \text{Money Multiplier} = \frac{1}{0.05} \][/tex]
Now, performing the division:
[tex]\[ \frac{1}{0.05} = 20.0 \][/tex]
Therefore, the correct option that corresponds to the money multiplier is:
[tex]\[ \boxed{D. \frac{1}{0.05}} \][/tex]
Thus, the money multiplier for a reserve rate of [tex]\( 0.05 \)[/tex] is 20.0.
