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The Money Multiplier process gives us an idea if the maximum possible expansion in the economy's money supply. Can you think of a reason why the money supply might not expand to the maximum extent possible? Think of some events that have occurred recently in the credit markets and business community to help you develop your answer.

[BTM]

Short answer, politics.

Moar: http://en.wikipedia.org/wiki/Monetary_policy

[JayKay335i]

Because the money multiplier is a cripple

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Originally Posted by BTM

Short answer, politics.

Moar: http://en.wikipedia.org/wiki/Monetary_policy

Thanks!

Originally Posted by JayKay335i

Because the money multiplier is a cripple