What is the money multiplier?
a) A measure of the potential or maximum amount the money supply can increase when new deposits enter the system.
b) A measure of the amount of excess reserves banks hold.
c) A measure of the amount of total reserves banks hold.
d) A measure of the maximum amount of savings that can happen when account holders deposit money in a bank account.
Ans: a) A measure of the potential or maximum amount the money supply can increase when new deposits enter the system.
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