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Suppose the public decides to hold more currency and fewer deposits in banks. Wh...

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Suppose the public decides to hold more currency and fewer deposits in banks. Which statement describes the effects of this decision?

Bank reserves decrease, and the money supply eventually decreases.

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Bank reserves increase, and the money supply eventually increases.

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Bank reserves decrease, but the money supply does not change.

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Bank reserves increase, but the money supply does not change.

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