When banks reduce the reserve ratio, the potential money multiplier
A) increases.
B) decreases.
C) remains unchanged.
D) sometimes increases, and sometimes decreases depending on the rate of inflation.
Correct Answer:
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Q466: If the reserve ratio decreases from 20
Q467: The formula is the Q468: What is a fractional reserve banking system? Q469: What are reserves? Discuss the various types Q470: Explain what happens to the money supply Q472: Suppose the Fed purchases $1 million in Q473: Which of the following would reduce the Q474: Which of the following would reduce the Q475: When people decide to increase the amount Q476: Why does the money supply increase when
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