The money multiplier in an economy increases with which one of the following?

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Q: (IAS/2021)
The money multiplier in an economy increases with which one of the following?

question_subject: 

Economics

question_exam: 

IAS

stats: 

0,285,45,19,15,285,11

keywords: 

{'cash reserve ratio': [0, 0, 1, 2], 'economy': [1, 3, 8, 35], 'increases': [2, 0, 3, 12], 'statutory liquidity ratio': [0, 0, 1, 0], 'banking habit': [0, 0, 0, 2], 'banks': [5, 6, 5, 25], 'money': [2, 0, 2, 10], 'population': [3, 1, 2, 1]}

The money multiplier refers to the amount of money that can be created by banks from each unit of central bank reserves. An increase in the Cash Reserve Ratio (CRR) in the banks will decrease the amount of money that banks can lend, thereby reducing the money multiplier. An increase in the Statutory Liquidity Ratio (SLR) in the banks will also reduce the amount of money that banks can lend, thereby decreasing the money multiplier. An increase in the banking habit of the people or an increase in the population of the country may lead to an increase in the deposit base of the banks, but it may not necessarily increase the lending capacity of the banks. Therefore, the correct answer is neither option A nor option B.