Credit (Bank deposit/ Money) multiplier

Credit (Bank deposit/ Money) multiplier

Credit multiplier (M) is the number of times the initial bank deposits multiply   to give the final bank deposits

Example 1

Calculate the total credit created  when the initial  deposits  are 5,000/=  and the cash ratio  is 5%

Solution

Total final deposit = 20 x 5000 = 100,000/=

CATEGORIES
TAGS
Share This

COMMENTS

Wordpress (0)
Disqus ( )