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Question
Assuming initially that rr = 10%, c = 40%, and e = 0, a decrease in rr to 5% causes the M1 money multiplier to ________, everything else held constant.
A) increase from 2.8 to 3.11
B) decrease from 3.11 to 2.8
C) increase from 2 to 2.22
D) decrease from 2.22 to 2
Answer
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