Consider the Money and Credit Expansion Process

question 33

Multiple Choice

Consider the money and credit expansion process.When r = the desired reserve ratio, what is the total change in chequable deposits equal to?  

• A) The total change in chequable deposits equals the initial change in excess reserves multiplied by r. 
• B) The total change in chequable deposits equals the initial change in excess reserves plus the change in desired reserves. 
• C) The total change in chequable deposits equals the initial change in excess reserves divided by 1/r. 
• D) The total change in chequable deposits equals the initial change in excess reserves multiplied by 1/r.