Lowering the required reserve ratio raises the simple deposit multiplier.

Name: Lowering the required reserve ratio raises the simple deposit multiplier.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Lowering the required reserve ratio means banks are required to hold less money in reserves, allowing them to lend out more money to borrowers. This increases the simple deposit multiplier, as a given amount of reserves can support a larger amount of loans and deposits.

Lowering the Required Reserve Ratio Raises the Simple Deposit Multiplier