Answer to Question #58372 in Macroeconomics for al

Question

The actual or real world money multiplier is generally less than the simple money multiplier. Indicate whether the statement is TRUE or FALSE; and then provide support for your answer.

Answer 1

The actual or real world money multiplier is generally less than the simple money multiplier.
It is true, because in real world not all of the potential free deposited money and money borrowed from the central bank can be loaned by the second, third time and so on. That's why the real multiplier will be lower.