Consider an economy with $12 billion in base money and a multiplier of 6. The money supply is currently $12 billion × 6 = $72 billion. Now let's say that the amount of base money increases by 50 percent, to $18 billion. How must the multiplier change for the money supply to remain unaffected by this change in base money? Instructions: Round your answer to two decimal places. The multiplier must change to: |
Consider an economy with $12 billion in base money and a multiplier of 6. The money supply is currently $12 billion × 6 = $72 billion. Now let's say that the amount of base money increases by 50 percent, to $18 billion. How must the multiplier change for the money supply to remain unaffected by this change in base money? Instructions: Round your answer to two decimal places. The multiplier must change to: |
Chapter10: Bringing In The Supply Side: Unemployment And Inflation?
Section: Chapter Questions
Problem 4TY
Question
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![Consider an economy with $12 billion in base money and a multiplier of 6. The money supply is currently $12 billion × 6 = $72
billion. Now let's say that the amount of base money increases by 50 percent, to $18 billion. How must the multiplier change for the
money supply to remain unaffected by this change in base money?
Instructions: Round your answer to two decimal places.
The multiplier must change to: |](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7fd5f7f1-b119-4f1a-8351-c55414b2f577%2F5193addb-87dc-4cb7-8ad6-162402755c03%2Fla5rpkl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consider an economy with $12 billion in base money and a multiplier of 6. The money supply is currently $12 billion × 6 = $72
billion. Now let's say that the amount of base money increases by 50 percent, to $18 billion. How must the multiplier change for the
money supply to remain unaffected by this change in base money?
Instructions: Round your answer to two decimal places.
The multiplier must change to: |
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