When the Required Reserve Ratio Is Changed

question 64

Multiple Choice

When the required reserve ratio is changed,

• A) the money multiplier is changed but the amount of excess reserves in the banking system is unchanged.
• B) the money multiplier is unchanged but the amount of excess reserves in the banking system is changed.
• C) the size of the money multiplier and the amount of excess reserves change in the opposite direction from the required reserve ratio.
• D) the size of the money multiplier and the amount of excess reserves change in the same direction as the required reserve ratio.