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If the Federal Reserve raises the monetary base by one dollar, then the money supply rises by 1/f dollars. For example, if the reserve requirement is f = . 10, then the money supply rises by ten dollars, and one says that the money multiplier is ten.

Calculating a Deposit - YouTube YouTube Start of suggested clip End of suggested clip Your deposit. So as an example let's say you wanted to buy a house or property. For three hundredMoreYour deposit. So as an example let's say you wanted to buy a house or property. For three hundred and fifty. Thousand dollars as your purchase.

List all of your yearly or large expenses: The first thing you need to understand is your yearly incomings and outgoings and decide how much money you'll be able to put aside each month to help you meet your sinking fund goals.

A sinking fund is a fund created specifically to save or set aside money to pay off a debt or a bond. A company may face an immense outlay when the time comes to pay off debts and bonds issued in the past. In this case, a sinking fund helps soften the impact of this large cost.

The formula for the money multiplier is simply 1/r, where r = the reserve ratio. A little too easy, right? It's the reciprocal of the reserve ratio. When r is the reserve ratio for all banks in an economy, then each dollar of reserves creates 1/r dollars of money in the money supply.