Other things the same if reserve requirements are decreased,the reserve ratio
A)decreases,the money multiplier increases,and the money supply decreases.
B)increases,the money multiplier increases,and the money supply increases.
C)decreases,the money multiplier increases,and the money supply increases.
D)increases,the money multiplier increases,and the money supply decreases.

Question

Quizplus · Accepted Answer

When reserve requirements are decreased, banks can hold less reserves and lend more, decreasing the reserve ratio. This increases the money multiplier, leading to an increase in the money supply.

Other Things the Same If Reserve Requirements Are Decreased,the Reserve