Explain what is meant by the reserve ratio. Give the formulas for the simple money multiplier and the money multiplier when people hold cash and explain the difference between the two. Use r=.1 and c=.1. What would happen to the real world multiplier as people begin to hold a larger fraction of their assets in the form of cash? In 2008, Bank Failures dramatically increased (red line) What was likely to happen to the growth of the money supply as people held more money in cash and not in banks.