An Increase in the Legal Reserve Ratio

Multiple Choice

An increase in the legal reserve ratio

A) increases the money supply by increasing excess reserves and increasing the monetary multiplier.
B) decreases the money supply by decreasing excess reserves and decreasing the monetary multiplier.
C) increases the money supply by decreasing excess reserves and decreasing the monetary multiplier.
D) decreases the money supply by increasing excess reserves and decreasing the monetary multiplier.