If the Fed decreases the monetary base by $100 million and the money multiplier is 4, M1 will

If the Fed decreases the monetary base by $100 million and the money multiplier is 4, M1 will



a. fall by $25 million.
b. rise by $25 million.
c. fall by $400 million.
d. rise by $400 million.

Answer: D


FIN 201

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