If the central bank in some country raised the reserve requirement,then the money multiplier for that country
A)would increase.
B)would not change.
C)would decrease.
D)could do any of the above.

Question

Quizplus · Accepted Answer

When the reserve requirement is raised, banks are required to hold a higher percentage of their deposits as reserves. This reduces the amount of money that can be lent out, which in turn reduces the money multiplier. Therefore, the money multiplier would decrease.

If the Central Bank in Some Country Raised the Reserve