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.

Name: 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.
Brand: Quizplus
Rating: 4.8 (42 reviews)

Question

Quizplus · Accepted Answer

The M1 money multiplier is calculated as 1/rr. Therefore, a decrease in rr from 10% to 5% would increase the M1 money multiplier from 1/0.1 (2.8) to 1/0.05 (3.11), everything else held constant.

Assuming Initially That Rr = 10%,c = 40%,and E =