Explain why the money multiplier rises
• Explain why the money multiplier rises if we choose to hold less currency and put more money in bank deposits.• Explain why the money multiplier falls if banks wish to hold more excess reserves relative to deposits.
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Explain why the money multiplier rises if we choose to hold less currency and put more money in bank deposits.
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Without performing any calculations, will the interval increase, decrease or stay the same? Which of the values in the formula will change?
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