Which of the following is true?

Question

Quizplus · Accepted Answer

The required reserve ratio is the percentage of deposits that banks are required to hold as reserves. The lower the required reserve ratio, the larger the amount of funds that banks can lend out, which increases the money multiplier. Therefore, option C is correct. 
Option A is false because actual reserves equal excess reserves plus required reserves. 
Option B is false because the predominant liability of banks is deposits, not loans. 
Option D is also false because if some banks choose not to lend all of their excess reserves, the total amount of money created will be smaller, not larger.

Which of the Following Is True