The money multiplier formula _____.
(A) Is used by the Board of Governors to decide interest rate cuts.
(B) Determines the amount of new money that will be created with each demand deposit.
(C) Determines the amount of funds loaned by the Federal Reserve Bank to its members.
(D) Is used by the Fed to determine the amount of currency in the economy.
Ans: (B) Determines the amount of new money that will be created with each demand deposit.
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