As the Reserve Ratio Increases, What Happens to the Money

question 69

Multiple Choice

As the reserve ratio increases, what happens to the money multiplier and money supply?

• A) The money multiplier increases, but the money supply does not change.
• B) The money multiplier does not change, but the money supply increases.
• C) The money multiplier and the money supply both increase.
• D) The money multiplier and the money supply both decrease.

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