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Which of the Following Statements Is True

Question 135

Multiple Choice

Which of the following statements is true?


A) The higher the required reserve ratio, the higher the deposit multiplier.
B) The higher the excess reserves, the higher the deposit multiplier.
C) The value of the deposit multiplier falls if economic agents withdraw cash from the banking system.
D) The deposit multiplier only works to increase money supply, not to decrease money supply.

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