The Actual Multiplier Is Often Less Than What One Would

question 60

Multiple Choice

The actual multiplier is often less than what one would calculate using the desired reserve ratio because

• A)some loans earn more interest than other loans.
• B)people may keep cash and banks may keep excess reserves.
• C)there may already have been some excess reserves in the banking system.
• D)banks keep some of their desired reserves as vault cash.

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