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What effect might a financial panic have on the money multiplier and the money supply? Why? In a financial panic, you would expect the money
What effect might a financial panic have on the money multiplier and the money supply? Why? In a financial panic, you would expect the money multiplier to and the money supply to increase decrease remain the same , which would cause the excess reserves ratio to increase remain the same decrease . Thus depositors are likely to decrease increase not change their holdings of currency
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