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Assuming Initially That R = 10%,c = 40%,and E =

Question 37

Multiple Choice

Assuming initially that r = 10%,c = 40%,and e = 0,a decrease in r to 5% causes the M1 money multiplier to ________,everything else held constant.

A) increase from 2.8 to 3.11
B) decrease from 3.11 to 2.8
C) increase from 2 to 2.22
D) decrease from 2.22 to 2

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