A decrease in ________ leads to an equal ________ in the monetary base in the short run.

Question

Quizplus · Accepted Answer

A decrease in float leads to an equal decrease in the monetary base in the short run because float represents the temporary discrepancy between the amount of money the Federal Reserve credits to banks and the amount it has actually collected. A reduction in float means the Fed has collected more funds, thus reducing the amount of money in the banking system, which decreases the monetary base.

A Decrease in ________ Leads to an Equal ________ in the Monetary

A Decrease in Leads to an Equal in the Monetary