If the Money Multiplier Is 3

question 384

Multiple Choice

If the money multiplier is 3.5,a $10 billion increase in the monetary base

• A) increases the quantity of money by $35 billion.
• B) increases the quantity of money by $10 billion.
• C) increases the quantity of money by $3.5 billion.
• D) increases the quantity of money but not by an amount given above.