Asked by Germanee Foster on May 12, 2024
Verified
Bank runs and the accompanying increase in the money multiplier caused the U.S. money supply to rise by 28 percent from 1929 to 1933.
Money Multiplier
The ratio of the amount of money created by the banking system through loans and deposits to the amount of money injected into the economy by the central bank.
- Gain insight into the notion and repercussions of bank runs within the financial ecosystem and economic health.
- Recognize the implications of altering the money supply for economic performance.
Verified Answer
ND
Niyati DesaiMay 16, 2024
Final Answer :
False
Explanation :
The U.S. money supply actually decreased by about a third from 1929 to 1933, primarily due to bank runs and failures, not an increase in the money multiplier.
Learning Objectives
- Gain insight into the notion and repercussions of bank runs within the financial ecosystem and economic health.
- Recognize the implications of altering the money supply for economic performance.