Refer to the above information.If the desired reserve ratio falls from 25 percent to 10 percent, excess reserves of this single bank will:
A)rise by $6,000 and the monetary multiplier will increase from 4 to 10.
B)rise by $60,000 and the monetary multiplier will increase from 4 to 10.
C)fall by $6,000 and the monetary multiplier will decline from 30 to 10.
D)fall by $2,000 and the monetary multiplier will decline from 10 to 4.

Question

Refer to the above information.If the desired reserve ratio falls from 25 percent to 10 percent, excess reserves of this single bank will:
A)rise by $6,000 and the monetary multiplier will increase from 4 to 10. 
B)rise by $60,000 and the monetary multiplier will increase from 4 to 10. 
C)fall by $6,000 and the monetary multiplier will decline from 30 to 10. 
D)fall by $2,000 and the monetary multiplier will decline from 10 to 4.

Quizplus · Accepted Answer

The Answer of  Refer to the above information.If the desired reserve ratio falls from 25 percent to 10 percent, excess reserves of this single bank will:
A)rise by $6,000 and the monetary multiplier will increase from 4 to 10. 
B)rise by $60,000 and the monetary multiplier will increase from 4 to 10. 
C)fall by $6,000 and the monetary multiplier will decline from 30 to 10. 
D)fall by $2,000 and the monetary multiplier will decline from 10 to 4.

Refer to the Above Information