M1 money multiplier equals
A)(transaction accounts + currency) ÷ monetary base
B)(transaction accounts currency) ÷ monetary base
C)(transaction accounts + currency) × monetary base
D)(transaction accounts currency) × monetary base

Question

M1 money multiplier equals
A)(transaction accounts + currency) ÷ monetary base
B)(transaction accounts ­ currency) ÷ monetary base
C)(transaction accounts + currency) × monetary base
D)(transaction accounts ­ currency) × monetary base

Quizplus · Accepted Answer

The M1 money multiplier equals the total amount of money that the banking system can create through the deposit process. It can be calculated as (transaction accounts + currency) ÷ monetary base.

M1 Money Multiplier Equals