What does the money multiplier measure?

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Economics · Economics

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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The maximum amount of commercial bank money that can be created for a given unit of central bank money.

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Answer 1

The ratio of reserves to deposits in commercial banks.

Answer 2

The maximum amount of commercial bank money that can be created for a given unit of central bank money.

Answer 3

The ratio of total currency to total deposits.

Answer 4

The ratio of the monetary base to the total money supply.

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