If the reserve requirement is 20%, then a $1 decrease in deposits means that the money supply:
A) will decrease by $5.
B) has the potential to increase by $20.
C) will increase by $5.
D) has the potential to decrease by $5.

Question

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The Answer of If the reserve requirement is 20%, then a $1 decrease in deposits means that the money supply:
A) will decrease by $5.
B) has the potential to increase by $20.
C) will increase by $5.
D) has the potential to decrease by $5.

If the Reserve Requirement Is 20%, Then a $1 Decrease