The Fed has decreased the money supply. The formula for calculating the resulting change in demand deposits is

a. (1/RRR) minus the change in reserves
b. (1/RRR) multiplied by the change in reserves
c. the change in reserves divided by [1 - (1/RRR)]
d. RRR minus the change in reserves
e. [1 - (1/RRR)] multiplied by the change in reserves

B

Economics

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