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If private banks want to hold a lot of excess reserves at the Fed then the money multiplier will be: a high, and monetary stimulus
If private banks want to hold a lot of excess reserves at the Fed then the money multiplier will be:
a high, and monetary stimulus will be more effective.
b low, and monetary stimulus will be less effective.
c high, and fiscal stimulus will be effective.
d low, and the reserve ratio will be higher.
e unchanged, as long as the velocity of money is constant.
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