If the Money Multiplier Is 3

question 69

Multiple Choice

If the money multiplier is 3.0, a $1,000 increase in the monetary base

• A) increases the quantity of money by $3,000.
• B) decreases the quantity of money by $3,000.
• C) increases the money multiplier by 3 per cent.
• D) decreases the quantity of money by 3 per cent.
• E) increases the monetary base by $300.

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Definitions:

Euro

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The officially issued money by the United States, including coins and paper bills used as a medium of exchange.

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The official currency of the United States of America, symbolized by the $ sign.

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The official currency of Japan, symbolized as ¥ and abbreviated as JPY.