Holding Everything Else Constant, If the Required Reserve Ratio Falls

question 397

Multiple Choice

Holding everything else constant, if the required reserve ratio falls:

• A)the money multiplier increases.
• B)a $1 loan can lead to a smaller change in the money supply than before the change in the required reserve ratio.
• C)the amount of excess reserves falls also.
• D)the money multiplier decreases.

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