Which factor reduces the size of the money multiplier?

CA Foundation · Business Economics · MTP · May 2026
Which factor reduces the size of the money multiplier?
(A) A. Lower reserve ratio
(B) B. Increase in currency holdings by public
(C) C. Higher bank lending
(D) D. Lower interest rates

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Increase in currency holdings by public

Topics: Money Market

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