multiplier effect


The expansion of the money supply that results from a Federal Reserve System member bank's ability to lend significantly in excess of its reserves.

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You need to know how the multiplier effect might work for your product and find a way to take advantage of it.

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Gold bugs like to claim that bank runs are caused by paper money, but due to the multiplier effect, the same problem would happen with any currency as long as fractional reserve banking was taking place.

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My boss encouraged the President of the United States to appoint a chairman of the Federal Reserve who would increase lending to banks because of the strong multiplier effect this would have on the economy.

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