Consider an economy with $12 billion in base money and a multiplier of 6. The money supply is currently $12 billion × 6 = $72 billion. Now let's say that the amount of base money increases by 50 percent, to $18 billion. How must the multiplier change for the money supply to remain unaffected by this change in base money? Instructions: Round your answer to two decimal places. The multiplier must change to: |
Consider an economy with $12 billion in base money and a multiplier of 6. The money supply is currently $12 billion × 6 = $72 billion. Now let's say that the amount of base money increases by 50 percent, to $18 billion. How must the multiplier change for the money supply to remain unaffected by this change in base money? Instructions: Round your answer to two decimal places. The multiplier must change to: |
Chapter10: Bringing In The Supply Side: Unemployment And Inflation?
Section: Chapter Questions
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