Which Statement Best Describes the Outcomes of a Decrease in the Reserve

question 83

Multiple Choice

Which statement best describes the outcomes of a decrease in the reserve requirement 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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