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    Exam 8: Money, the Price Level, and Inflation
  5. Question
    When the Monetary Base Increases by $4 Billion, the Quantity
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When the Monetary Base Increases by $4 Billion, the Quantity

Question 8

Question 8

Multiple Choice

When the monetary base increases by $4 billion, the quantity of money increases by $10 billion. Thus, the money multiplier equals


A) 0.4.
B) 2.5.
C) 40.0.
D) none of the above.

Correct Answer:

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