Assuming initially that r = 15%,c = 40%,and e = 5%,a decrease in e to 0% causes the M1 money multiplier to ________,everything else held constant.

Name: Assuming initially that r = 15%,c = 40%,and e = 5%,a decrease in e to 0% causes the M1 money multiplier to ________,everything else held constant.
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Question

Quizplus · Accepted Answer

The M1 money multiplier is calculated as (1 + c) / (r + e + c). With e decreasing from 5% to 0%, the denominator decreases, leading to an increase in the multiplier from 2.33 to 2.55.

Assuming Initially That R = 15%,c = 40%,and E =