Question 52
MediumOriginal questionMatch each term with its meaning.
| List I | List II |
|---|---|
| A. High-powered money | I. Money supply ÷ high-powered money |
| B. Money multiplier | II. New deposits that come from banks' lending |
| C. Excess reserves | III. Currency with the public + bank reserves |
| D. Credit creation | IV. Reserves above the required amount |
Show the answer and explanation
CorrectNot quiteAnswer A
Correct answer: A
Explanation
H is the base; the multiplier is M ÷ H; excess reserves are unused lending power; credit creation is the deposits that lending produces.
- Concept
- Terms of money creation
- Typical timeTypical
- 90 s
- Your timeYours
- —
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