In a fractional-reserve banking system, an increase in reserve requirements
a. increases both the money multiplier and the money supply.
b. decreases both the money multiplier and the money supply.
c. increases the money multiplier, but decreases the money supply.
d. decreases the money multiplier, but increases the money supply.
b
You might also like to view...
As income rises ________
A) the number of transactions households and firms undertake should increase B) wealth also rises C) demand for real money balances should increase D) all of the above E) none of the above
The market system does not produce public goods because:
A. there is no need or demand for such goods. B. private firms cannot stop consumers who are unwilling to pay for such goods from benefiting from them. C. public enterprises can produce such goods at lower cost than can private enterprises. D. their production seriously distorts the distribution of income.