Identify what change to the money supply

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Q. Define and explain the money multiplier. Identify the change to the money supply in the following situation: The required reserve ratio is 12.5 percent and the Fed increases the monetary base by $100.

Q. Suppose that the economy starts at eqilibrium and the mpc=0.8 what would be the effect of a $500 increase in taxes once all the rounds of the mulitipier process are complete?

Reference no: EM1351123

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