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Question
Assuming initially that the required reserve ratio = 10%, the currency-deposit ratio = 40%, and the excess reserve ratio = 0, a decrease in the required reserve ratio 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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Related questions
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