If the Reserve Requirement Decreases from 20% to 25% and the Currency

question 35

Multiple Choice

If the reserve requirement decreases from 20% to 25% and the currency to deposit ratio increases from 10% to 15% then

• A)the money multiplier and the money supply rises.
• B)the money multiplier and the money supply stays the same.
• C)the money multiplier and the money supply falls.
• D)the money multiplier rose and the money supply falls.

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