Glossary BG Image

Glossary of Stock Market Terms

Browse Terms By Number or Letter:
Financial Terms By: m
Money multiplier

Under the fractional reserve banking system, a unit of cash injected into the system by a central bank increases as it propagates through the banking system. Thus an increase in the monetary base has a magnified effect on the money supply and the multiplicative effect is represented by the money multiplier.

Copyright © 2018, Campbell R. Harvey. All Worldwide Rights Reserved. Do not reproduce without explicit permission.