The money multiplier would be larger in which of the following scenarios?

CA Foundation · Business Economics · PYQS · January 2026
The money multiplier would be larger in which of the following scenarios?
(A) A. Smaller expenditure-deposit ratio
(B) B. Higher currency-deposit ratio
(C) C. Smaller currency-expenditure ratio
(D) D. Smaller currency-deposit ratio

Suggested Answer and Working Notes:

Correct Answer: Option (D)

D. Smaller currency-deposit ratio

Topics: Money Market

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