What does money multiplier mean?
Definitions for money multiplier
mon·ey mul·ti·pli·er
This dictionary definitions page includes all the possible meanings, example usage and translations of the word money multiplier.
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Wikidata
Money multiplier
In monetary economics, a money multiplier is one of various closely related ratios of commercial bank money to central bank money under a fractional-reserve banking system. Most often, it measures the maximum amount of commercial bank money that can be created by a given unit of central bank money. That is, in a fractional-reserve banking system, the total amount of loans that commercial banks are allowed to extend is a multiple of reserves; this multiple is the reciprocal of the reserve ratio, and it is an economic multiplier. Although the money multiplier concept is a traditional portrayal of fractional reserve banking it has been criticized as being misleading. The Bank of England and the Standard and Poors rating agency have issued detailed refutations of the concept together with factual descriptions of banking operations. Several countries set no legal reserve requirements. Even in those countries that do, the reserve requirement is as a ratio to deposits held, not a ratio to loans that can be extended. Under the Basel III global regulatory standard, it is the level of bank capital that determines the maximum amount that banks can lend.
Numerology
Chaldean Numerology
The numerical value of money multiplier in Chaldean Numerology is: 5
Pythagorean Numerology
The numerical value of money multiplier in Pythagorean Numerology is: 9
Translations for money multiplier
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"money multiplier." Definitions.net. STANDS4 LLC, 2024. Web. 25 Apr. 2024. <https://www.definitions.net/definition/money+multiplier>.
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