If the Federal Reserve Increases the Interest Rate on Bank

question 21

Multiple Choice

If the Federal Reserve increases the interest rate on bank deposits at the Fed,banks will want to hold

• A)fewer reserves,so the money multiplier will fall.
• B)fewer reserves,so the money multiplier will rise.
• C)more reserves,so the money multiplier will fall.
• D)more reserves,so the money multiplier will rise.