If banks increase excess reserves to increase their ability to absorb a higher rate of defaults:
A) the potential multiplier will rise.
B) the potential multiplier will fall.
C) the actual multiplier will rise.
D) the actual multiplier will fall.

Question

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The Answer of If banks increase excess reserves to increase their ability to absorb a higher rate of defaults:
A) the potential multiplier will rise.
B) the potential multiplier will fall.
C) the actual multiplier will rise.
D) the actual multiplier will fall.

If Banks Increase Excess Reserves to Increase Their Ability to Absorb