Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 24

Consider an economy with $10 billion in base money and a multiplier of 4. The money supply is currently $10 billion 3 4 5 $40 billion. Now let's say that the amount of base money rises by 50 percent, to $15 billion. How must the multiplier change for the money supply to remain unaffected by this change in base money?