An Increase in the Market Interest Rate Will Increase the Size

question 21

Multiple Choice

An increase in the market interest rate will increase the size of the money multiplier since

• A)the reserve-deposit ratio will decrease
• B)the currency-deposit ratio will increase
• C)the demand for money will decrease
• D)banks will earn more interest on their existing assets
• E)banks will get more interest on the deposits they hold at the Fed

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