In an economy, if the money multiplier equals 5.5, and the current- deposit ratio is 0.1, what is the value of reserve-deposit ratio?A.0.1B.0.04C.0.2D.0.15

The money multiplier is calculated by the formula 1 / (Reserve-Deposit Ratio + Current-Deposit Ratio).

Given that the money multiplier is 5.5 and the current-deposit ratio is 0.1, we can substitute these values into the formula and solve for the reserve-deposit ratio.

5.5 = 1 / (Reserve-Deposit Ratio + 0.1)

To isolate the reserve-deposit ratio, we first take the reciprocal of both sides:

1 / 5.5 = Reserve-Deposit Ratio + 0.1

This simplifies to:

0.1818 = Reserve-Deposit Ratio + 0.1

Subtract 0.1 from both sides to solve for the reserve-deposit ratio:

0.1818 - 0.1 = Reserve-Deposit Ratio

0.0818 = Reserve-Deposit Ratio

So, the reserve-deposit ratio is approximately 0.08. However, this is not one of the options given. It seems there may be a mistake in the question or the provided options.