Money multipler practice problems
Calculate the money multiplier, and then calculate the required change in the monetary
base in order to achieve the desired change in the money supply.
Answers are given below.
desired
change money change in
cr rr in M multiplier monetary base
0.7 0.10 100
0.7 0.11 100
0.7 0.12 200
0.8 0.10 200
0.8 0.11 300
0.8 0.12 300
0.6 0.10 400
0.6 0.11 400
0.6 0.12 500
Answers
desired
change money change in
cr rr in M multiplier monetary base
0.7 0.10 100 2.1250 47.059
0.7 0.11 100 2.0988 47.647
0.7 0.12 200 2.0732 96.471
0.8 0.10 200 2.0000 100.000
0.8 0.11 300 1.9780 151.667
0.8 0.12 300 1.9565 153.333
0.6 0.10 400 2.2857 175.000
0.6 0.11 400 2.2535 177.500
0.6 0.12 500 2.2222 225.000