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Suppose the Federal Reserve increases the amount of reserves by $90 million and the total money supply increases by $270 million. Instructions: Enter your answers
Suppose the Federal Reserve increases the amount of reserves by $90 million and the total money supply increases by $270 million.
Instructions: Enter your answers as a whole number.
a. What is the money multiplier?
b. Using the money multiplier from part a, how much will the money supply change if the Federal Reserve increases reserves by $30 million?
$ million
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