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

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

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A decrease in float (uncleared checks) leads to a decrease in deposits at banks. This means banks have less reserves to meet their reserve requirements, which leads to a decrease in the monetary base. Therefore, an equal decrease in the monetary base occurs in the short run.

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

A Decrease in Leads to an Equal in the Monetary