If the Bank of Canada increases the monetary base by $5 million and the money multiplier is 5,M1 will

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The money multiplier determines how much the money supply will change with a change in the monetary base. If the money multiplier is 5 and the Bank of Canada increases the monetary base by $5 million, then the money supply will increase by 5 times that amount, which is $25 million (5 x $5 million). Therefore, M1 will rise by $25 million.

If the Bank of Canada Increases the Monetary Base by $5