CBSE 2019 Class 12 Economics Outside Delhi Set 1

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Question : 5
Total: 24
Define 'money multiplier'.
Solution:  
When the primary cash deposits in the banking system loads to multiple explanation in the total deposits, it is caused as money multiplier. It is inversely related to legal reserve ratio.

Total deposits
Money multiplier =
Primary cash deposits
Prim

Or
1
Legal reserve ratio
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