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Calculate the money multiplier

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Reference no: EM131929014

Initial Conditions

rr/D = .10

C = 400 billion

D = 800 billion

ER = 0

M = C + D

Given the above information (show all work on your exam sheet):

i) Calculate the MB.

ii) Calculate the money multiplier (mm).

iii) What is the money supply (use MS = mm x MB)?

Reference no: EM131929014

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