If the desired reserve requirement is raised,the money multiplier

Name: If the desired reserve requirement is raised,the money multiplier
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Question

Quizplus · Accepted Answer

When the desired reserve requirement is raised, banks will be required to hold more reserves which means they will have less money to loan out. As a result, the money multiplier will decrease, leading to a lower amount of money being created through the banking system. Therefore, option A) is the correct answer.

If the Desired Reserve Requirement Is Raised,the Money Multiplier