In the 19th Century,when Crop Failures Often Led to Bank

question 7

Multiple Choice

In the 19th century,when crop failures often led to bank runs,banks would make relatively fewer loans and hold relatively more excess reserves.By itself,these actions by the banks should have

• A)increased the money multiplier and the money supply.
• B)decreased the money multiplier and increased the money supply.
• C)increased the money multiplier and decreased the money supply.
• D)decreased both the money multiplier and the money supply.

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