The simple money multiplier is 12.5.
The reserve ratio is the ratio the Central Bank of a country requires banks to keep as reserves in order to meet unforeseen circumstances. For example, if the reserve ratio is 8%, if a customers deposits $1000, banks must keep $80 as reserves.
Money multiplier is the maximum amount of money commercial banks can create.
Money multiplier = 1 / reserve ratio
1 / 8%
1 / 0.08 = 12.5
A similar question was answered here: https://brainly.com/question/14223065
