To determine the money multiplier given a reserve rate [tex]\( r = 0.07 \)[/tex], we use the money multiplier formula:
[tex]\[
\text{Money Multiplier} = \frac{1}{\text{Reserve Ratio}}
\][/tex]
In this case, the reserve ratio is [tex]\( 0.07 \)[/tex]. Plugging this value into the formula, we get:
[tex]\[
\text{Money Multiplier} = \frac{1}{0.07}
\][/tex]
Calculating this,
[tex]\[
\frac{1}{0.07} \approx 14.285714285714285
\][/tex]
Therefore, the money multiplier, given a reserve rate of 0.07, is approximately 14.285714285714285.
