Holding Everything Else Constant,if the Required Reserve Ratio Falls

question 395

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 also falls.
• D) the money multiplier decreases.

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