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Money Multiplier Causes

MACRO-VBBG1T

Despite a 133% increase in the monetary base from 2008 to 2010 the money supply only grew 19%.

What contributed to the inability of the Federal Reserve to increase the money supply as much as they would have liked?

A

People holding more of their money as currency (hording).

B

The treasury’s inability to keep up with printing currency.

C

Too many banks shutting down.

D

The banks holding more money in reserves.