Comparing _______ can give us some sense of what the money multiplier is.
A) the monetary base to M2
B) the monetary base to M1
C) M1 to M2
D) the monetary base to fiat money

Question

Quizplus · Accepted Answer

The monetary base is the sum of currency in circulation and bank reserves. M2 is a measure of the money supply that includes currency, demand deposits, and other liquid assets. Comparing the monetary base to M2 can give us some sense of what the money multiplier is, which is the ratio of the money supply to the monetary base.

Comparing _______ Can Give Us Some Sense of What the Money