If the fraction of deposits held as reserves increases, then the money supply will decrease.

Name: If the fraction of deposits held as reserves increases, then the money supply will decrease.
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If the fraction of deposits held as reserves increases, banks are required to hold a larger portion of their deposits as reserves and loan out less. This reduces the amount of money in circulation, leading to a decrease in the money supply.

If the Fraction of Deposits Held as Reserves Increases, Then