8. The money multiplier declined significantly during the period 1930–1933 and also during the recent financial crisis of 2008–2010. Yet the M1 money supply decreased by 25% in the Depression period but increased by more than 20% during the recent financial crisis. What explains the difference in outcomes?

ECON MACRO
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ISBN:9781337000529
Author:William A. McEachern
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Chapter14: Banking And The Money Supply
Section: Chapter Questions
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8. The money multiplier declined significantly during the period 1930–1933 and also
during the recent financial crisis of 2008–2010. Yet the M1 money supply decreased
by 25% in the Depression period but increased by more than 20% during the recent
financial crisis. What explains the difference in outcomes?

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