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A Decrease in the Excess Reserves Banks Want to Hold

Question 71

Multiple Choice

A decrease in the excess reserves banks want to hold would:


A) increase the money supply.
B) decrease the money supply.
C) result in an increase in the total reserves held by the banks.
D) have an indeterminate effect on the money supply.
E) result in an increase in the required reserves held by the Federal Reserve.

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