Assuming initially that rr = 15%,c = 40%,and e = 5%,a decrease in e to 0% causes the M1 money multiplier to ________,everything else held constant.

Name: Assuming initially that rr = 15%,c = 40%,and e = 5%,a decrease in e to 0% causes the M1 money multiplier to ________,everything else held constant.
Brand: Quizplus
Rating: 4.8 (48 reviews)

Question

Quizplus · Accepted Answer

The M1 money multiplier is calculated as (1 + c) / (rr + e + c). With e decreasing from 5% to 0%, the denominator decreases, causing the multiplier to increase from 2.33 to 2.55.

Assuming Initially That Rr = 15%,c = 40%,and E =