..........

23. Suppose there are $700 billion held in deposits, $500 billion of currency in circulation, banks hold $10 billion of excess reserves initially, and the Fed changes reserve requirement from 10% to 15%. How will the change in reserve requirements affect the money multiplier (assuming banks will increase reserves only by just enough to comply with Fed's new requirements, currency and deposits remain constant, round everything to two decimal places) a. Money multiplier won't change b. Will increase by 0.09 c. Will fall by 0.12 (1. Will fall by 0.13 e. Will fall by 0.09