If banks decide to hold some of their excess reserves instead of lending them all out:
A) the money multiplier will be less than 1 divided by the required reserve ratio.
B) a loan of $1 will lead to a change in the money supply by a multiple amount equal to 1 divided by the required reserve ratio.
C) the money multiplier becomes 1 divided by the excess reserves.
D) depositors will have to borrow more to increase the money supply.
Correct Answer:
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