When the Required Reserve Ratio Is Changed

When the required reserve ratio is changed,

A) the money multiplier is changed but the amount of excess reserves in the banking system is unchanged.
B) the money multiplier is unchanged but the amount of excess reserves in the banking system is changed.
C) the size of the money multiplier and the amount of excess reserves change in the opposite direction from the required reserve ratio.
D) the size of the money multiplier and the amount of excess reserves change in the same direction as the required reserve ratio.
E) neither the money multiplier nor the amount of excess reserves change.

Correct Answer:

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