Refer to the Above Information

Multiple Choice

Refer to the above information.If the desired reserve ratio falls from 25 percent to 10 percent, excess reserves of this single bank will:

A) rise by $6,000 and the monetary multiplier will increase from 4 to 10.
B) rise by $60,000 and the monetary multiplier will increase from 4 to 10.
C) fall by $6,000 and the monetary multiplier will decline from 30 to 10.
D) fall by $2,000 and the monetary multiplier will decline from 10 to 4.