If the Fed Increases the Reserve Ratio from 4 Percent

question 365

Multiple Choice

If the Fed increases the reserve ratio from 4 percent to 10 percent, then the money multiplier

• A)decreases from 25 to 10.
• B)decreases from 20 to 10.
• C)increases from 10 to 25.
• D)increases from 10 to 20.

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