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Which of the Following Would Cause the Money Supply to Increase

Question 23

Multiple Choice

Which of the following would cause the money supply to increase by less than the amount indicated by the money multiplier?


A) A financial institution lends less than its increase in excess reserves.
B) A person borrowing money converts part of it to cash rather than putting it all in a demand deposit account.
C) Both of the above.
D) None of the above.

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