When the Monetary Base Increases by $4 Billion, the Quantity

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.

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Definitions:

Primary Liable

Being the first or main party responsible for fulfilling an obligation or compensating for damages.

Co-signs

The act of signing a loan or agreement jointly with another person, thereby assuming equal responsibility for the repayment.

Collectively

refers to actions or measures taken as a whole by a group of people or entities.

Primarily Liable

Having the main or first responsibility for a debt or obligation.