-In Table 13-1, If the Required Reserve Ratio Is 10

Multiple Choice

-In Table 13-1, if the required reserve ratio is 10 percent, what will happen to the money supply?
Use the oversimplified money multiplier in your calculations.

A) The money supply will decrease by $100 million.
B) The money supply will decrease by $10 million.
C) The money supply will not change.
D) The money supply will increase by $10 million.
E) The money supply will increase by $100 million.