If the reserve requirement decreases from 20% to 25% and the currency
If the reserve requirement decreases from 20% to 25% and the currency to deposit ratio increases from 10% to 15% then
a. the money multiplier and the money supply rises.
b. the money multiplier and the money supply stays the same.
c. the money multiplier and the money supply falls.
d. the money multiplier rose and the money supply falls.
ANSWER
B
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