question archive Suppose that investment is fixed, as in Chapter 3
Suppose that investment is fixed, as in Chapter 3
Subject:EconomicsPrice: Bought3
Suppose that investment is fixed, as in Chapter 3. The paradox of saving suggests that an increase in the desire to save will cause GDP to _(increase? decrease?) 7. Suppose total reserve is 100, money multiplier is 2.5, reserve ratio is 0.1. Then currency equals money base is and money supply is 8. During the Great Depression, the U.S. economy experienced many bank runs, to the point where people became unwilling to keep their money in banks, preferring to hold on to their cash. We would expect that such a shift away from checkable deposits toward currency to (increase/decrease) the money multiplier. 7
