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

Question 203

Multiple Choice

Assuming initially that r = 10%,c = 40%,and e = 0,an decrease in c to 30% causes the M1 money multiplier to ________,everything else held constant.

A) increase from 2.8 to 3.25
B) decrease from 3.25 to 2.8
C) increase from 2.8 to 3.5
D) decrease from 3.5 to 2.8

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