Economics A-Level
Credit multiplier
What Credit multiplier means in Economics A-Level, as defined for AQA.
Definition of Credit multiplier
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Reference: AQA
Calculated as 1 divided by the reserve ratio, it determines the maximum total credit created from an initial deposit.
Topics that use Credit multiplier
- Commercial banks and investment banks (AQA A-Level)
Related terms
- Commercial banks
- Credit creation
- Financial intermediation
- Financial markets
- Investment banks
- Liquidity
- Liquidity vs Profitability
- Market participants
Using Credit multiplier in the exam
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