Assuming Initially That the Required Reserve Ratio = 15%,the Currency-Deposit

question 164

Multiple Choice

Assuming initially that the required reserve ratio = 15%,the currency-deposit ratio = 40%,and the excess reserve ratio = 5%,an increase in the excess reserve ratio to 10% causes the M1 money multiplier to ________,everything else held constant.

• A)increase from 2.15 to 2.33
• B)decrease from 2.33 to 2.15
• C)increase from 1.54 to 1.67
• D)decrease from 1.67 to 1.54

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