In a Fractional Reserve Banking System,how Does an Increase in the Reserve

question 47

Essay

In a fractional reserve banking system,how does an increase in the reserve requirement change the money multiplier?
a.The money multiplier increases by a higher percentage change than the increase in the reserve ratio.
b.The money multiplier decreases by a higher percentage change than the increase in the reserve ratio.
c.The money multiplier increases by a lower percentage change than the increase in the reserve ratio.
d.The money multiplier decreases by a lower percentage change than the increase in the reserve ratio.

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