Which of the Following Will Make the Real-World Money Multiplier

Multiple Choice

Which of the following will make the real-world money multiplier smaller than the theoretical formula?

A) Banks actually hold fewer reserves than technically required by the Fed.
B) Banks actually make loans for more money than they have in excess reserves.
C) Banks may keep some excess reserves rather than loan it all out.
D) Consumers spend more than they have using credit cards.