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Money Multiplier

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What is the Money Multiplier?
How does the Federal Reserve System shape the Monetary Policy?

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Money Multiplier is discussed very comprehensively in this explanation..

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Money Multiplier

What is the Money Multiplier?
The money multiplier is the multiple by which the increase in money supply is greater than the increase in the monetary base. This is the method through which excess reserves create new demand deposits or money. The money multiplier is the amount of money the banking system as a whole creates with each dollar of reserve. This is the expansion of the country's money supply that results from banks' ability to lend.
How does the Federal Reserve System shape the Monetary Policy?
The Federal ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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