If the ratio of reserves to deposits (rr) increases, while the ratio of currency to deposits (cr) is constant and the monetary base (B) is constant, then:

Question

Accepted Answer

the money supply decreases.

Answer

the money supply does not change.

Answer

the money supply increases.

Answer

it cannot be determined whether the money supply increases or decreases.

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If the ratio of reserves to deposits (rr) increases, while the ratio of currency...

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