During the Great Depression years of 19301933, bank panics led to a dramatic rise in the currency

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During the Great Depression years of 1930–1933, bank panics led to a dramatic rise in the currency and excess reserves ratios, while the monetary base rose by 20%. Explain how banks’ and depositors’ behavior led to the sharp increase in the currency and excess reserves ratio, and explain using the money multiplier model why the money supply actually fell by 25% during that period despite the 20% rise in the monetary base.

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