Mathematics · Money Multiplier Formula
The Money Supply equation in high-powered money multiplier theory is expressed as: M = H × 1 + cc + r(1 + t) where M = Total Money Supply, H = High-Powered Money, c = currency-deposit ratio, r = reserve-deposit ratio, and t = time-deposit ratio. Which option correctly matches this relationship?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1M = H × 1 - cc - r(1 + t)
- 2M = H × 1 + cc + t(1 + r)
- 3M = H × 1 + cc + r(1 + t)✓
- 4M = H × 1 + tc + r(1 + t)
Correct answer
M = H × 1 + cc + r(1 + t)
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