The Fed increased the monetary base between $2008$ and $2014.$

What happened to the money multiplier between $2008$ and$2014?$

What would the money multiplier have been if the currency drain ratio had$$ increased?

What would the money multiplier have been if the$$ banks' desired reserve ratio had not$$ changed?

Question content area bottom

Part $1$

Between $2008$ and$2014,$ the money multiplier$\_\_\_\_\_\_\_.$

A$.$

remained relatively constant

B$.$

decreased to zero

C$.$

decreased but remained positive

Your answer is correct.

D$.$

increased

Part $2$

In a typical$$ year, the currency drain ratio is $0\mathrm{.}11$ and the desired reserve ratio is $0\mathrm{.}01.$

$$

$$

So if between $2008$ and$2014,$ neither the currency drain ratio nor the$$ banks' desired reserve ratio had$$ changed, the money multiplier would have been