Week 7 Discussion the Public Sector 2

Week 7 Discussion the Public Sector 2 - supply (a higher...

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The Multiplier Effect is a measure of the country’s monetary supply. This occurs as a result of a bank’s capacity to lend and therefore it is dependence on banks’ required reserves. A low reserve indicates a higher ability to lend money to borrowers which results in an increase in the money
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Unformatted text preview: supply (a higher multiplier effect). Conversely a high reserve leads to a lower multiplier effect. Source: http://financial-dictionary.thefreedictionary.com/Multiplier+(economics)...
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