Currency deposit ratio
Understand the Problem
The question refers to the currency deposit ratio, which typically relates to the proportion of money that individuals or businesses hold in the form of cash as opposed to deposit accounts in banks. It involves concepts from finance and economics, particularly concerning monetary policy and banking.
Answer
The amount of currency that people hold as a proportion of aggregate deposits.
The currency deposit ratio is the amount of currency that people hold as a proportion of aggregate deposits.
Answer for screen readers
The currency deposit ratio is the amount of currency that people hold as a proportion of aggregate deposits.
More Information
An increase in the currency deposit ratio typically results in a decrease in the money multiplier because more cash is held outside the banking system.
Sources
- Currency-deposit ratio definition - Economic Times - economictimes.indiatimes.com
- Currency Deposit Ratio - KeyCalc - keycalc.org
- Money Supply Definition - Investopedia - investopedia.com
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