Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Money and Banking

Question:

"The ratio of total money supply to the stock of high powered money in an economy" is referred to :

Options:

Money Multiplier

Tax Multiplier

GDP Multiplier

Money Supply

Correct Answer:

Money Multiplier

Explanation:

The correct answer is Money Multiplier.

The money multiplier is a measure of the extent to which a central bank can increase the money supply by adding money to the economy. It is calculated by dividing the total money supply by the stock of high-powered money, which is the money held by the central bank and commercial banks.