How Does the Desired Reserve Ratio Affect the Money Multiplier

question 111

Multiple Choice

How does the desired reserve ratio affect the money multiplier?  

• A) the higher the desired reserve ratio, the larger the money multiplier 
• B) the higher the desired reserve ratio, the smaller the money multiplier 
• C) the higher the desired reserve ratio, the more likely there will be no effect on the money multiplier 
• D) the higher the desired reserve ratio, the more likely the money multiplier may increase or decrease

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