The ratio of the money supply to the monetary base is called:
A) the currency-deposit ratio.
B) the reserve-deposit ratio.
C) high-powered money.
D) the money multiplier.

Question

Quizplus · Accepted Answer

The ratio of the money supply to the monetary base is referred to as the money multiplier. It is the process by which an increase in the monetary base results in a larger increase in the money supply. The money multiplier is determined by the reserve requirement and the currency deposit ratio.

The Ratio of the Money Supply to the Monetary Base