Imagine that economic conditions are poor and that there are very few borrowers to whom banks want to lend. Now, after the bank holds required reserves of 10 percent, we know that only 50 percent of the remaining deposits will be given out in loans. What effect does this have on the deposit expansion multiplier?
a) It decreases the deposit expansion multiplier.
b) It increases the deposit expansion multiplier.
c) It has no effect on the deposit expansion multiplier.
d) It makes it impossible to calculate the deposit expansion multiplier.