Answer to Question #55809 in Macroeconomics for Javarn Shaw
Liquidity ratios are financial analysis tools commonly used to gauge a company's ability to repay short-term creditors out of its cash fund. Liquidity ratios measure a company’s liquid assets against its short-term liabilities. So, in case of a lower liquidity ratio the bank will get more liabilities, that will be used to create new money by allowing to clients new loans, so the multiplier will increase.
Need a fast expert's response?Submit order
and get a quick answer at the best price
for any assignment or question with DETAILED EXPLANATIONS!