An initial deposit of Rs 5,000 results in a multiple expansion of credit to Rs 100000,what is the value of money multiplier:(a).2 (b). 8 (C). 10 (d). 20
Question
An initial deposit of Rs 5,000 results in a multiple expansion of credit to Rs 100000,what is the value of money multiplier:(a).2 (b). 8 (C). 10 (d). 20
Solution
To find the value of the money multiplier, we can use the formula:
Money Multiplier = Total Deposits / Initial Deposit
In this case, the initial deposit is Rs 5,000 and the total deposits are Rs 100,000.
So, the money multiplier is:
Money Multiplier = 100,000 / 5,000 = 20
Therefore, the value of the money multiplier is 20.
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