6. The simple money multiplier Suppose that the Federal Reserve ("the Fed") buys $150.000 of U.S. government bonds and the required reserve ratio is 0.30. If the assumpons of the simple money multiplier hold, this will V the money supply by V . which of the following assumptions is necessary for the simple money multiplier to be applicable? 0 The Fed has set the required reserve ralio to between 5% and 10%. 0 Banks hold no excess reserves. 0 Banks have perfect information about the creditworthiness of all borrowers. If the correct assumption did not hold. the change in the money supply would be V than you previously found. Which of the following describes why this holds true? O The mulplier only holds as long as the required reserve ratio is less than 15%. Q If banks held excess reserves, they would make fewer loans. 0 Banks would make fewer loans than they would if they could perfectly observe borrowers' true riskiness