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Q1 How could rapid inflation undermine money’s ability to perform each of its four basic jobs? Q2 The money multiplier gives the maximum amount of potential change in the money supply due to a change in reserves. It is equal to the reciprocal of the required reserve ratio. If the reserve ratio is 25%, what is the money multiplier. What is this number telling us?

Q1

How could rapid inflation undermine money’s ability to perform each of its four basic jobs?

Q2

The money multiplier gives the maximum amount of potential change in the money supply due to a change in reserves. It is equal to the reciprocal of the required reserve ratio. If the reserve ratio is 25%, what is the money multiplier. What is this number telling us?

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