Multiple Choice
Which of the following best describes the consequences of a decrease in the reserve requirements in a fractional reserve system?
A) Both the money multiplier and the money supply increase.
B) Both the money multiplier and the money supply decrease.
C) The money multiplier increases, but the money supply decreases.
D) The money multiplier decreases, but the money supply increases.
Correct Answer:
Verified
Correct Answer:
Verified
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