money multiplier

Definition

The ratio between the supply of actual money in an economy, and the total supply of money plus available credit. The amount of available purchasing power in an economy is generated by banks lending out currency while keeping a fraction of deposits on site, expanding the working money supply.

Use money multiplier in a sentence

We had some man do a money multiplier technique which determined the ratio between a couple of variables that were important.

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The money multiplier was higher this year than last which was indicative of the increased perceived viability and demand for credit.

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Our role as a money multiplier has been crucial in propping up many sectors of the economy, and we were well positioned to ride out the recession in good shape.

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