If the Central Bank Lowered the Reserve Requirement, What Happens

question 194

Multiple Choice

If the central bank lowered the reserve requirement, what happens to the money multiplier and the money supply?

• A) The money multiplier increases, but the money supply decreases.
• B) The money multiplier decreases, but the money supply increases.
• C) The money multiplier and the money supply both increase.
• D) The money multiplier and the money supply both decrease.

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