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"The money multiplier is equal to the _______________ in the economy divided by the original _________________. a. total money; quantity of money b. original quantity of reserves; reserve ratio c. quantity of money; total money d. reserve ratio; original quantity of reserves"

User Pseudo
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Answer:

a. total money ; quantity of money

Step-by-step explanation:

Money multiplier

Under the fractional - reserve banking system , the closely related ratios of the commercial bank money to the central bank money or the monetary base , is called the money multiplier .

It measures the maximum amount of money , that a commercial bank can make , on ignoring leakage in the currency by the non - bank public .

The value of money multiplier can be calculated as the total money in present in the economy , divided by the original quantity of money .

User Cyphorious
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