Question

Give the relation between money multiplier and total credit creation.

Answer 1

Answer:

The amount of credit that a system of banking can create depends upon the reserve ratio. The banks can multiply a given amount of cash to many times of credit. ... We can, thus, think of a credit creation multiplier. The higher the reserve ratio, the smaller is the credit creation multiplier.

THANKYOU...

Answer 2

${\huge {\underline {\tt {\blue {Answer}}}}}$

The amount of credit that a system of banking can create depends upon the reserve ratio. The banks can multiply a given amount of cash to many times of credit. ... We can, thus, think of a credit creation multiplier. The higher the reserve ratio, the smaller is the credit creation multiplier.

:)