Suppose the and the Reserve Requirement Is 10 Percent

Multiple Choice

Suppose the and the reserve requirement is 10 percent. If Bob writes a check to you for $100 and you choose to cash the check and hold on to $100 in currency, then:

A) the money supply can increase by as much as $1000.
B) the money supply will decrease by exactly $100.
C) the money supply will not change.
D) the money supply can decrease by as much as $1000.