The Money Supply Will Grow Faster Through Deposit Creation When

question 16

Multiple Choice

The money supply will grow faster through deposit creation when the required reserve ratio is:

• A) high and banks hold excess reserves.
• B) high and banks cannot find good customers to lend to.
• C) low and banks are able to lend out all of their excess reserves.
• D) low and banks are unable to loan out all of their excess reserves.

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