- Expert Academic and Article Professional Writing Service
- +1 323 471 4575
- academicperfect@gmail.com
Money Multiplier and its Role
Money Multiplier and its Role
Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages to Order 5-10 Pages Description/Paper Instructions
Money Multiplier and its Role
The money multiplier is a concept that refers to the way in which banks can create money through the process of lending. In simple terms, the money multiplier explains how a single deposit of money into a bank can lead to multiple loans and deposits, which in turn can lead to the creation of new money in the economy.
The basic principle behind the money multiplier is that banks are required to hold only a fraction of their deposits as reserves, while the rest of the money can be loaned out to customers. This means that when a bank receives a deposit of $1,000, for example, it may be required to hold only $100 in reserve, allowing it to lend out the remaining $900 to other customers.
Assuming that the borrowers then deposit the $900 back into the banking system, the same process can repeat itself, with the bank holding only a fraction of the new deposit as reserves and lending out the rest. This process can continue indefinitely, with each new loan and deposit increasing the amount of money in circulation in the economy.
The money multiplier can be expressed mathematically as the reciprocal of the reserve requirement ratio. For example, if the reserve requirement ratio is 10%, the money multiplier would be 1/0.1 or 10. This means that a single deposit of $1,000 could potentially lead to the creation of up to $10,000 in new money in the economy.
However, it is important to note that the money multiplier is not a fixed or precise measure. It depends on a variety of factors, including the reserve requirement ratio, the willingness of banks to lend, and the demand for credit in the economy. In practice, the money multiplier is often much lower than its theoretical maximum, due to factors such as bank caution, borrower creditworthiness, and economic uncertainty.
The role of the money multiplier in the economy is significant, as it enables the creation of credit and the expansion of economic activity. When banks lend money, they are essentially creating new purchasing power in the economy, allowing individuals and businesses to spend and invest more than they would otherwise be able to. This can lead to increased economic growth, job creation, and higher standards of living.
However, the money multiplier can also contribute to economic instability and financial crises if not managed carefully. If banks become too liberal in their lending practices, or if borrowers become overextended, it can lead to a wave of defaults and bank failures. This in turn can lead to a contraction of credit and a reduction in economic activity, as occurred during the global financial crisis of 2008.
In conclusion, the money multiplier is an important concept that helps to explain how banks create money through the process of lending. While it can play a positive role in promoting economic growth and development, it also poses risks if not managed carefully. As such, policymakers and regulators must be mindful of the money multiplier and its effects when formulating economic policy and overseeing the financial system.
Money Multiplier and its Role
RUBRIC
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. Grammar (worth maximum of 20% of total points) Zero points: Student failed to submit the final paper. 5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors 10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors 15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. 20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. Structure of the Paper (worth 10% of total points) Zero points: Student failed to submit the final paper. 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper.
GET THIS PROJECT NOW BY CLICKING ON THIS LINK TO PLACE THE ORDER
CLICK ON THE LINK HERE: https://essaysolver.com/orders/ordernow
You Can Also Place the Order In www.perfectacademic.com/orders/ordernow / www.essaysolver.com/orders/ordernow
Do You Have Any Other Essay/Assignment/Class Project/Homework Related to this? Click Here Now [CLICK ME] and Have It Done by Our PhD Qualified Writers!!
PLACE THE ORDER WITH US TODAY AND GET A PERFECT SCORE!!!
Do You Have Any Other Essay/Assignment/Class Project/Homework Related to this? Click Here Now [CLICK ME] and Have It Done by Our PhD Qualified Writers!!
Why Work With Us!!
Tired of getting an average grade in all your school assignments, projects, essays, and homework? Try us today for all your academic schoolwork needs. We are among the most trusted and recognized professional writing services in the market.
We provide unique, original and plagiarism-free high quality academic, homework, assignments and essay submissions for all our clients. At our company, we capitalize on producing A+ Grades for all our clients and also ensure that you have smooth academic progress in all your school term and semesters.
High-quality academic submissions, A 100% plagiarism-free submission, Meet even the most urgent deadlines, Provide our services to you at the most competitive rates in the market, Give you free revisions until you meet your desired grades and Provide you with 24/7 customer support service via calls or live chats.
