During the Christmas season, people tend to draw money out of their checking accounts to pay for presents. As a result, the actual money multiplier will

Question

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When people withdraw money from their checking accounts, the amount of excess reserves in the banking system decreases, which reduces the ability of banks to make new loans and create new deposits. This decrease in the ability of banks to create money lowers the actual money multiplier, resulting in a decrease in the money supply.

During the Christmas Season, People Tend to Draw Money Out