Which of the Following Reduces the Money Multiplier

question 338

Multiple Choice

Which of the following reduces the money multiplier?

• A)Banks loan all their excess reserves.
• B)Bank customers hold some of the loan proceeds as currency outside the banking system.
• C)The Fed reduces the required reserve ratio.
• D)Banks impose a currency drain on bank customers.
• E)The Fed sells U.S.government securities.

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