The money-creation multiplier is affected by the

Question

Quizplus · Accepted Answer

The money-creation multiplier is affected by both A and B. A refers to the demand for currency versus demand deposits, which determines how much of the deposits banks can lend out. B refers to the reserve-holding ratio, which determines how much banks can lend out of their available deposits. These factors together determine the total amount of money that can be created through the lending process. The rediscount rate is not directly related to the money-creation multiplier, although it can affect the cost of borrowing for banks and ultimately influence their lending behavior.

The Money-Creation Multiplier Is Affected by the