Which of the following reduces the money multiplier? O banks loan all their excess reserves O the Fed raises the required reserve ratio O the Fed sells U.S. government securities O bank customers do not hold any of the loan proceeds as currency outside the banking system O banks impose a currency drain on bank customers

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter13: Money And The Banking System
Section: Chapter Questions
Problem 8CQ
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48
Which of the following reduces the money
multiplier?
banks loan all their excess reserves
O the Fed raises the required reserve ratio
O the Fed sells U.S. government securities
O bank customers do not hold any of the loan
proceeds as currency outside the banking
system
banks impose a currency drain on bank
customers
Transcribed Image Text:Which of the following reduces the money multiplier? banks loan all their excess reserves O the Fed raises the required reserve ratio O the Fed sells U.S. government securities O bank customers do not hold any of the loan proceeds as currency outside the banking system banks impose a currency drain on bank customers
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