Which Statement Is False

Multiple Choice

Which statement is false?

A) Since some people choose to hold some of their currency,the deposit multiplier is lower than one divided by the reserve ratio.
B) In times of inflation banks are quite likely to carry excess reserves.
C) If banks choose to hold excess reserves;the deposit multiplier will be lower than expected.
D) If there is a large drain of dollars to foreigners because of a large trade imbalance,the deposit multiplier will be lower than expecteD.