It is most likely that the money multiplier will get smaller If people hold onto money as cash rather than depositing it.
What is money multiplier?
In economics, this refers to the relatives ratios of commercial bank money to central bank money under a fractional-reserve banking system.
In order word, it means the relates to maximum amount of commercial bank money that can be created or given as a certain amount of central bank money.
This effect of the money multiplier is a core concept in macroeconomics because it harbors the idea that because of the flow of money, an increase in wealth will pass through many hands.
However, It is most likely that the money multiplier will get smaller If people hold onto money as cash rather than depositing it.
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