Which of the following will lower the money multiplier?

Question

Quizplus · Accepted Answer

The money multiplier is calculated by dividing the amount of checkable deposits by the amount of reserves. An increase in the currency/checkable deposit ratio means that people are holding more currency and less in checkable deposits, which will decrease the amount of checkable deposits and therefore lower the money multiplier. The other options would increase the amount of reserves or decrease the required reserves, which would increase the money multiplier.

Which of the Following Will Lower the Money Multiplier