Consider the Creation of Deposit Money in the Banking System

Multiple Choice

Consider the creation of deposit money in the banking system.One implication of an increase in the cash drain to the public is that the

A) banking system cannot create any additional money following a new deposit.
B) amount of new money that can be created from a new source of reserves is increased.
C) desired ratio is reduced.
D) desired reserve ratio is increased.
E) banking system's ability to create new money following a new deposit is reduced.