During the early years of the Great Depression, a study of the money aggregates reveals that the money multiplier:

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During the early years of the Great Depression, the money multiplier decreased. This can be attributed to a decrease in the money supply, as banks had to call in loans and reduce lending due to increasing default rates and a lack of confidence in the stability of the banking system. This decrease in the money supply led to a decrease in the velocity of money and a further contraction of the economy.

During the Early Years of the Great Depression, a Study