The money creation multiplier is not the same as the money multiplier

No. The money creation multiplier enables a bank to increase the amount of money by creating one unit of base money. The money multiplier is the ratio of the money supply to the base money.

Money Creation Multiplier Calculation: The formula for calculating the full monetary (policy) multiplier is k=(rc+1) (rd+re+rc), where rd, re, and rc represent the statutory reserve ratio, excess reserve ratio, and cash ratio to deposits, respectively. The basic formula for calculating the money (policy) multiplier is the money supply base money.

The money supply is equal to the sum of currency (i.e., cash in circulation) and demand deposits, while the base money is equal to the sum of currency and reserves.

Not a concept.

The money creation multiplier refers to the amount of money that a bank can increase by creating one unit of base money. The money creation multiplier refers to the value of the money supply (m: total currency and demand deposits) to the base money (h:

The ratio of changes in the total reserves of commercial banks plus the currency held by the non-banking sector.

The money multiplier, also known as the money expansion coefficient or money expansion multiplier, refers to the credit expansion multiple generated by the money supply on the basis of the base money (high-energy money) through the function of commercial banks to create deposits and generate derived deposits, which is a multiple of money supply expansion. In real economic life, the money and loans provided by banks will generate deposits several times their size through several deposits, loans, and other activities, that is, what is commonly referred to as derivative deposits. The size of the money multiplier determines the size of the money supply's ability to expand.

The money creation multiplier is the same as the money multiplier is one meaning and depends on.

1. Statutory reserve ratio.

2. Excess reserve ratio.

3. Cash ratio.

4. Interest rates. 5. Expected deposit outflow.

The difference in returns is the difference in yield.

It is a concept, don't be misled by the first floor, the two concepts moved from the first floor are the same meaning, the money creation multiplier is also known as the money multiplier, and the money multiplier in the narrow sense is the reciprocal of the statutory reserve ratio, and more generally it is m h

The meaning of these two terms is actually the same, but their conditions are different.

You may have seen two multipliers, one is k=1 (re+rd+rc) and the other is k=1+rc rc+re+rd, the first of which is to assume that the amount of money is only demand deposits, and the second is to assume that the amount of money is currency + demand deposits, and the introduction of high-energy money is calculated, and there is no difference between the two in terms of the essence of money creation.

One molecule has a cash leakage rate and one doesn't.

The 17th edition of the horse project thinks that the two are the same.

Not a concept, please see above.

The main factors influencing the base currency are:

1) **Re-lending, re-discounting, etc. from banks to commercial banks and other financial institutions.

2) Net bank loans to banks.

3) **Banks buy and sell various items on the open market**.

4) **Bank Trading**, foreign exchange reserves.

5) Net bank loans to other sectors.

The main factors that affect the size of the currency multiplier are:

1) Statutory reserve ratio. The currency multiplier moves in the opposite direction to the statutory reserve ratio.

2. Excess reserve ratio. The money multiplier moves in the opposite direction to the excess reserve ratio.

3. Cash ratio. The currency multiplier moves in the opposite direction to the cash ratio.

The size of the AC money multiplier determines the size of the money supply's ability to expand. The size of the currency multiplier is determined by the following factors:

1. Statutory reserve ratio. The statutory reserve ratio for time deposits and demand deposits is determined directly by the bank. In general, the higher the statutory reserve ratio, the smaller the currency multiplier; Conversely, the greater the currency multiplier.

2. Excess reserve ratio. The ratio of reserves held by commercial banks in excess of statutory reserves to total deposits is called the excess reserve ratio. Obviously, the existence of excess reserves correspondingly reduces the ability of banks to generate derivative deposits, so the relationship between the excess reserve ratio and the money multiplier is also inverse, the higher the excess reserve ratio, the smaller the money multiplier; Conversely, the greater the currency multiplier.

The money multiplier, also known as the money expansion coefficient or money expansion multiplier, refers to the credit expansion multiple generated by the money supply on the basis of the base money (high-energy money) through the function of commercial banks to create deposits and generate derived deposits, which is a multiple of money supply expansion. The size of the money multiplier determines the size of the money supply's ability to expand.

The size of the currency multiplier is determined by the following factors:

1. Cash ratio.

The higher the cash ratio, the smaller the currency multiplier.

2. Excess reserve ratio.

The higher the excess reserve ratio, the smaller the currency multiplier; Conversely, the greater the currency multiplier.

3. Statutory reserve ratio.

The higher the statutory reserve ratio, the smaller the currency multiplier; Conversely, the greater the currency multiplier.

The money creation multiplier refers to the ** bank.

One unit of base currency is created.

The amount of currency** that can be increased.

In the case of demand deposits, it can also create money through the demand deposit derivation mechanism.

The formula is. d=drr, and.

d=derrr+(d

is the total amount of demand deposits, r

For the original deposit, dr

Reserve for deposits, ER

reserve for excess deposits).

If there is also a cash outflow in the deposit creation mechanism, i.e., the loan is not completely converted into deposits, then the money creation multiplier is: dec1krrr=++ where cr

is the cash-to-deposit ratio.

In this case, only demand deposits are considered as the money supply.

If you put demand deposits and currency.

are considered as the money supply, ie.

m=d+uc

At the same time, a strong currency was introduced.

h (the bank is prepared to start the gold plus the currency held by the non-bank sector), at this time the money creation formula of which slag is as follows:

Affects the currency multiplier.

The factors are: cash leakage ratio, statutory reserve ratio for demand deposits, excess reserve ratio, and time deposits.

Percentage of deposits.

The currency multiplier can work in two ways:

It is possible to make both bank deposits.

The expansion of bank deposits can be multifolded, and bank deposits can shrink many times.

As a result, bank control of reserves and adjustment of reserve ratios can have a significant impact on the money supply.