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Suppose the M1 Multiplier Is Currently 1

question 53

Multiple Choice

Suppose the M1 multiplier is currently 1.95 and the M2 multiplier is currently 8.03.If the ratio of retail money-market mutual funds to transaction accounts increases, the M1 multiplier will _____and the M2 multiplier will ______.


Definitions:

Credits

Entries in accounting that increase liabilities or equity or decrease an asset or expense.

Transaction Recording Process

The systematic approach of documenting financial transactions in the accounting records of a business, ensuring accuracy and completeness.

Analyze

The process of examining data or information to break it down into its components, understand its structure, and identify patterns or relationships.

Journal

An accounting record where all transactions are initially recorded, chronologically, before they are transferred to ledger accounts.

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