Which of the Following Is an Outcome of a Decrease

question 83

Multiple Choice

Which of the following is an outcome of a decrease in the reserve requirement ratio?

• A)DIs must hold more reserves against the transaction accounts on their balance sheets.
• B)DIs are able to lend a smaller percentage of their deposits.
• C)Decreased credit availability in the economy.
• D)A multiple contraction in deposits and a decrease in the money supply.
• E)A multiplier effect on the supply of DI deposits and thus, the money supply.

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