The money multiplier in an economy increases with which one of the following?

1. The money multiplier indicates how much the money supply will increase in response to a change in the monetary base. It is inversely related to reserve requirements and the currency-deposit ratio. 2. Option (A) is incorrect. An increase in the Cash Reserve Ratio (CRR) means banks have to hold a larger fraction of their deposits as reserves, reducing their capacity to lend and thus decreasing the money multiplier. 3. Option (B) is incorrect. An increase in the Statutory Liquidity Ratio (SLR) requires banks to hold more assets in liquid forms, similarly restricting their lending capacity and decreasing the money multiplier. 4. Option (C) is correct. An increase in the banking habit of the people means people deposit more money into banks and hold less cash. This reduces the currency drain from the banking system, allowing banks to create more credit for a given amount of reserves, thereby increasing the money multiplier. 5. Option (D) is incorrect. An increase in the population does not directly influence the reserve ratios or the banking habit in a way that necessarily increases the money multiplier.