If banks'desired reserve ratio increases from 0.10 to 0.15, the public still desires to hold the same amount of currency, and the Fed takes no actions, the money supply will:

Name: If banks'desired reserve ratio increases from 0.10 to 0.15, the public still desires to hold the same amount of currency, and the Fed takes no actions, the money supply will:
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Question

Quizplus · Accepted Answer

When banks increase their desired reserve ratio, they hold more reserves and lend out less money, which decreases the money supply.

If Banks'desired Reserve Ratio Increases from 0