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Question
Number of times the commercial banks are able to create total deposits with the help of reserves ratio and initial deposits is known as ______.
Options
Investment multiplier
Money multiplier
Domestication
Rationalisation
MCQ
Fill in the Blanks
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Solution
Number of times the commercial banks are able to create total deposits with the help of reserves ratio and initial deposits is known as Money multiplier.
Explanation:
The term "deposit multiplier" or "money multiplier" refers to the number of times commercial banks are able to generate deposits using the initial deposit and reserve ratio.
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