The size of the money multiplier is not fixed,but instead depends on how much of their assets banks wish to hold as reserves.

Question

Quizplus · Accepted Answer

The money multiplier is not fixed and depends on the reserve ratio, which is determined by how much of their assets banks choose to hold as reserves. As banks can choose to hold different amounts of reserves, the size of the money multiplier can vary.

The Size of the Money Multiplier Is Not Fixed,but Instead