Which of the Following Best Describes the Consequences of a Decrease

question 171

Multiple Choice

Which of the following best describes the consequences of a decrease in the reserve requirements in a fractional reserve system?

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

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