When the monetary base increases by $2 billion,the quantity of money increases by $10 billion.Thus,the money multiplier equals

Name: When the monetary base increases by $2 billion,the quantity of money increases by $10 billion.Thus,the money multiplier equals
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Question

Quizplus · Accepted Answer

The money multiplier is calculated as the ratio of the change in the quantity of money to the change in the monetary base. In this case, the money multiplier would be 10/2 = 5. Therefore, the correct answer is B.

When the Monetary Base Increases by $2 Billion,the Quantity of Money