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

Question 105

Multiple Choice

Assuming initially that r = 10%,c = 40%,and e = 0,an increase in c to 50% causes the M1 money multiplier to ________,everything else held constant.

A) increase from 2.5 to 2.8
B) decrease from 2.8 to 2.5
C) increase from 2.33 to 2.8
D) decrease from 2.8 to 2.33

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