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

States the money multiplier depends on the currency-deposit ratio and the reserves-deposit ratio (rdr), and notes rdr depends on regulations on CRR and SLR.

A student can combine this with the basic fact that higher CRR raises required reserves (rdr) to infer higher CRR will change the multiplier (likely reduce it).

Defines CRR as the percentage of deposits banks must keep as cash reserves and shows that higher CRR reduces the portion of deposits available for lending.

Using the lending multiplier logic (less loanable funds → fewer deposit creation rounds), a student can infer higher CRR should lower the money multiplier.

Explains central bank quantitative tools include changing the reserve ratio and explicitly links changing the reserve ratio to changes in lending, deposits and hence money supply; poses a numeric example when reserve ratio is increased.

A student could work through the numeric example (e.g., computing multiplier for different reserve ratios) to test whether raising CRR raises or lowers the multiplier.

Notes that reserves can be kept as CRR or SLR and that rdr is the sum of CRR and SLR, tying CRR quantitatively into the reserve-deposit ratio which affects money creation.

A student could treat CRR as a component of rdr and recalc the theoretical multiplier formula (1/(cdr + rdr)) to see how an increase in CRR shifts the multiplier.

Gives the formal definition Money Multiplier = M3/M0 and states the multiplier may be impacted by any change in components of M3 or M0 (e.g., banking habits).

A student can reason that increasing CRR alters reserve money (part of M0 or affects bank lending that determines M3), so computing effects on M3 and M0 would show the direction of multiplier change.

States the money multiplier depends on the currency-deposit ratio and the reserves-deposit ratio, and notes that the reserve-deposit ratio depends on RBI regulations including CRR and SLR.

A student can combine this with the standard multiplier formula to infer that raising SLR raises reserve-deposit ratio, which (ceteris paribus) should reduce the multiplier.

Explains SLR is a statutory requirement limiting the amount of deposits banks can use to give loans, acting as a limit to credit creation.

Using the idea that less lendable deposits mean lower deposit expansion via fractional-reserve banking, a student can deduce higher SLR likely reduces the multiplier.

Defines SLR as the fraction of deposits banks must invest in specified liquid assets, clarifying SLR's role as part of reserves.

A student could map this reserve fraction into the reserves-deposit ratio in multiplier formulas to judge the SLR → multiplier relationship.

Clarifies SLR is maintained in safe liquid assets with respect to NDTL and that excess CRR balances count as liquid assets for SLR purposes.

A student can use this to reason about how regulatory changes to SLR change banks' available lending capacity and thus affect the multiplier.

Gives the operational definition of money multiplier (M3/M0) and notes it may be impacted by any change in components of M3 or M0, e.g., banking habits.

By treating SLR as affecting M3 (bank credit) or effective reserves in M0, a student can test whether raising SLR would lower M3 relative to M0 and thus reduce the multiplier.

This MCQ lists 'Increase in the population of the country' alongside other factors asked to affect the money multiplier, and separately includes 'increase in the banking habit of population' as an option — implying population-related behaviour is considered relevant to the multiplier.

A student could treat this as a prompt to distinguish mere population growth from changes in banking behaviour (e.g., higher deposit rates) when assessing multiplier effects.

Reports observed changes in the money multiplier and links at least one decline to banks' large deposits with the central bank under reverse repo — indicating that where deposits are parked (and not lent) matters for the multiplier.

Combine with a hypothesis that population-driven increases in deposits only raise the multiplier if those deposits are intermediated into loans rather than parked with the central bank.

States that higher demographic dividend (i.e., more working-age population) increases national savings and investment — a population change that can affect aggregate savings and hence banking deposits.

Extend by connecting higher population-driven savings to larger bank deposits, then test whether those deposits translate into increased lending and thus a higher money multiplier.

Explains that the value of a (fiscal) multiplier depends on marginal propensities (to import, consume, etc.), illustrating that multipliers generally hinge on behavioural ratios rather than raw size variables.

Use this general rule to argue the money multiplier will depend on behavioural ratios (e.g., currency–deposit ratio, reserve ratios, propensity to hold cash) which a population change only affects if it alters those ratios.

Defines multiplier logic in investment context and emphasizes the role of marginal propensities (MPC/MPS) in determining multiplier magnitude — reinforcing that multipliers are sensitive to propensities.

A student could analogously apply the idea: population growth per se matters only to the extent it changes behavioural parameters (propensity to save/deposit vs. hold cash), thereby affecting the money multiplier.