Explain the relationship between high powered money and money multiplier
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High-Powered Money and the Money Multiplier:
High -powered money is the sum of commercial bank reserves and currency (notes and coins) held by the public. High-powered money is the base for the expansion of bank deposits and creation of the money supply. ... A commercial bank's required reserves depend upon its deposits.
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Answer:
High-Powered Money and the Money Multiplier:
High -powered money is the sum of commercial bank reserves and currency (notes and coins) held by the public. High-powered money is the base for the expansion of bank deposits and creation of the money supply. ... A commercial bank's required reserves depend upon its deposits.
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