In the context of monetary economics, the 'Money Multiplier' is:
A. The ratio of exports to imports
B. The ratio of investment to saving
C. The ratio of fiscal deficit to GDP
D. The ratio of broad money to reserve money
Answer: Option D
Solution (By JKSSB Mock Tests)
The money multiplier is the ratio of the stock of broad money (such as M3) to the stock of reserve money, reflecting the extent of credit creation by the banking system.
Explanation:
Invisible trade (or invisibles) includes trade in services (such as tourism, software, transportation), income (interest, dividends) and unilateral transfers.
Explanation:
Merit goods are those that the government feels people will under-consume and which ought to be subsidised or provided free, such as education and healthcare.
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