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Macroeconomics

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Moderate

Money Multiplier Less Than One

MACRO-REWLWJ

In quarter 3 of 2008 the monetary base in the United States was \$893 billion and the M1 money supply was \$1.43 trillion.

By quarter 1 of 2010, the monetary base was \$2.09 trillion and the M1 money supply was \$1.70 trillion.

What happened to the money multiplier?

A

It fell to negative

B

It fell to less than one

C

It fell but is above one

D

It rose