" The ratio of total money supply to the stock of high powered money in an economy" is referred to :
Answer & explanation
Correct answer: option 1
The correct answer is option (1) : Money Multiplier
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The money multiplier refers to the ratio of total money supply to the stock of high-powered money (also called the monetary base or reserve money) in an economy.
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It indicates how much money is created in the banking system from a given amount of high-powered money.
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The formula for the money multiplier is:
Money Multiplier = Total Money Supply / High Powered Money
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High-powered money includes currency with the public and reserves held by commercial banks with the central bank.