Which Statement Is False

question 333

Multiple Choice

Which statement is false?

• A)Since some people choose to hold some of their currency,the deposit multiplier is lower than one divided by the reserve ratio.
• B)In times of inflation banks are quite likely to carry excess reserves.
• C)If banks choose to hold excess reserves;the deposit multiplier will be lower than expected.
• D)If there is a large drain of dollars to foreigners because of a large trade imbalance,the deposit multiplier will be lower than expecteD.

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