Match the following Values of money supply (M)& High- power Money(H) with the value of money…
The money multiplier is money supply divided by high-powered money, m = M/H. The four ratios are 100/20 = 5, 80/40 = 2, 20/5 = 4 and 180/60 = 3, so the matching is a-ii,…
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Match the following Values of money supply (M)& High- power Money(H) with the value of money multiplier(m):
| Values of M & H | Values of m |
|---|---|
| a. M=100 & H= 20 | i. 4 |
| b. M= 80 & H= 40 | ii. 5 |
| c. M=20 & H= 5 | iii. 3 |
| d. M=180 & H=60 | iv. 2 |
Answer and explanation
Correct answer A
The money multiplier is money supply divided by high-powered money, m = M/H. The four ratios are 100/20 = 5, 80/40 = 2, 20/5 = 4 and 180/60 = 3, so the matching is a-ii, b-iv, c-i, d-iii.
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Telangana SET (TG SET)