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As the Reserve Ratio Increases, What Happens to the Money

Question 69

Multiple Choice

As the reserve ratio increases, what happens to the money multiplier and money supply?


A) The money multiplier increases, but the money supply does not change.
B) The money multiplier does not change, but the money supply increases.
C) The money multiplier and the money supply both increase.
D) The money multiplier and the money supply both decrease.

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