In the money creation process, the simple money multiplier assumes that banks hold no excess reserves. What is the consequence of a bank holding excess reserves?

If banks hold excess reserves, then the money multiplier will be smaller.

Explanation:

It is easier to understand using an example:

required reserve rate = 5%

money multiplier = 1 / 5% = 20

if $100 are injected in to the economy and they are deposited in the banking system, the money supply will increase by $100 x 20 = $2,000. But this calculation only works if banks lend 100% of the loanable funds, but if instead banks only lend $90, instead of $95 ($100 x 95%), then the money multiplier will be 1 / 10% = 10. In this case, the money supply will only increase by half

answer; ///the name of the central bank of the united states is called; ///the federal reserve known as the federal

the answer is     d. in our global economy, most job growth will be in services, but manufacturing jobs will exist, too.