Science Fair Project Encyclopedia
High-powered money
High-powered money is a macroeconomic term referring to the monetary base, which is controlled by the institution in a country that controls monetary policy. This is usually either the finance ministry or the central bank.
The monetary base is called high-powered because the magnitude of changes in monetary base are greatly magnified by the money multiplier.
As an example, a 1% increase in monetary base may lead to a 10% increase in the money supply due to money multipler effects.
03-10-2013 05:06:04
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The contents of this article is licensed from www.wikipedia.org under the GNU Free Documentation License. Click here to see the transparent copy and copyright details