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The money multiplier in an economy increases with which one of the following?
[2019]
  • a)
    Increase in the cash reserve ratio
  • b)
    Increase in the banking habit of th e population
  • c)
    Increase in the statutory liquidity
  • d)
    Increase in the population of the country
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
The money multiplier in an economy increases with which one of the fol...
  • Money Multiplier directly improves with cut in legal reserve ratios (SLR, CRR: so A and D are wrong)
  • Money Multiplier indirectly improves as economy develops, consumption/loan demand increases, banking penetration improves etc.
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The money multiplier in an economy increases with which one of the fol...
  • Money Multiplier directly improves with cut in legal reserve ratios (SLR, CRR: so A and D are wrong)
  • Money Multiplier indirectly improves as economy develops, consumption/loan demand increases, banking penetration improves etc.
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The money multiplier in an economy increases with which one of the following?[2019]a)Increase in the cash reserve ratiob)Increase in the banking habit of th e populationc)Increase in the statutory liquidityd)Increase in the population of the countryCorrect answer is option 'B'. Can you explain this answer?
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