If the Fed Wanted to Decrease the Money Supply, One

question 134

Multiple Choice

If the Fed wanted to decrease the money supply, one way to make an enormous impact would be to:

• A) increase the reserve requirement, which would decrease the money multiplier.
• B) decrease the reserve requirement, which would decrease the money multiplier.
• C) increase the reserve requirement, which would increase the money multiplier.
• D) decrease the reserve requirement, which would increase the money multiplier.

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