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

Statement A is incorrect: Increase in the Cash Reserve Ratio (CRR) in banks. CRR is the percentage of deposits banks must keep with the RBI. If CRR increases, banks have less money to lend, reducing the money multiplier.

Statement B is incorrect: Increase in the Statutory Liquidity Ratio (SLR) in banks. SLR is the percentage of deposits banks must keep in liquid assets like gold or government securities. A higher SLR means less lending capacity, reducing the money multiplier.

Statement C is correct: Increase in the banking habits of the people. If more people deposit money in banks instead of holding cash, banks get more reserves to lend, increasing the money multiplier. This expands the credit creation process, leading to a higher money supply.

Statement D is incorrect: Increase in the population of the country. A higher population does not directly impact the money multiplier unless it leads to a rise in banking habits or economic activity.