Everything else held constant, an increase in the excess reserve ratio will mean ________ in the M1 money multiplier and ________ in the M2 money multiplier.

Everything else held constant, an increase in the excess reserve ratio will mean ________ in the M1 money multiplier and ________ in the M2 money multiplier.




A) an increase; an increase
B) no change; an increase
C) a decrease; a decrease
D) no change; a decrease



Answer: C