Multiple Choice
The money multiplier will be smaller when
A) bank customers prefer to hold a bigger amount of their money as cash (instead of in their checking account) .
B) banks prefer to lend out 9 percent of their excess reserves instead of 90 percent.
C) when the marginal propensity to save declines.
D) when the reserve ratio decreases.
Correct Answer:
Verified
Correct Answer:
Verified
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