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MA
Question Practice

How does the money multiplier effect relate to banking?

Attempt the question, check the explanation, and continue with similar questions to build confidence before exams.

MCQ_SA
CBSE
Class 12
Economics
Introductory Macroeconomics
Money And Banking
Question Bank

How does the money multiplier ...

Single Answer MCQ
Q-00089038

How does the money multiplier effect relate to banking?

1

It refers to how banks cannot lend deposits.

2

It shows that banks can lend multiple times the amount of reserves.

3

It indicates the physical creation of currency by banks.

4

It limits the maximum loans that banks can provide.

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