In February, 2010 the U.S. M1 money multiplier crashed to 0.786. Each $1 increase in the monetary base resulted in the quantity of money increasing by only $0.79. Where did the remaining $0.21 disappear?
A) Banks held part of the $0.21 as excess reserves.
B) Banks loaned out the $0.21.
C) Consumers held part of the $0.21 as currency.
D) Both A and C are correct.
Correct Answer:
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Q283: Currency outside of banks increases from $100
Q286: Q287: An increase in the currency drain Q289: A bank has no excess reserves. Then Q289: Q293: University National Bank Balance Sheet Q295: When part of the quantity of money Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents
A) leads
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