To determine the correct money multiplier given the reserve rate [tex]\( r = 0.07 \)[/tex], we need to understand the formula for the money multiplier.
The money multiplier is calculated as the inverse of the reserve rate. Mathematically, it can be expressed as:
[tex]\[
\text{Money Multiplier} = \frac{1}{\text{Reserve Rate}}
\][/tex]
Given the reserve rate [tex]\( r = 0.07 \)[/tex], we can substitute this value into the formula:
[tex]\[
\text{Money Multiplier} = \frac{1}{0.07}
\][/tex]
This means that the money multiplier is the value you get when you divide 1 by 0.07. The exact numerical result of this division is a non-repeating decimal:
[tex]\[
\frac{1}{0.07} = 14.285714285714285
\][/tex]
Therefore, the correct option among the provided choices is:
D. [tex]\(\frac{1}{0.07}\)[/tex]
