Money multiplier is the amount of money the banking system generates with each dollar of reserves.

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The money multiplier is a measure of the total amount of money that the banking system can create through the process of deposit multiplication. It is the inverse of the reserve requirement ratio and indicates the maximum increase in the money supply that can be achieved with a given amount of reserves. Therefore, it represents the amount of money that can be generated with each dollar of reserves.

Money Multiplier Is the Amount of Money the Banking System