The money multiplier a. decreases if banks increase their desired reserve ratio b. is 1 if the desired reserve ratio equals the currency drain ratio c. increases if the currency drain ratio increases d. increases if banks increase their desired reserve ratio

A. decreases if banks increase their desired reserve ratio

Step-by-step explanation:

Since, the money multiplier is the amount of money produced by banks with each dollar of reserves,

In other words,

It estimates, how an initial deposit can lead to a bigger final increase in the total money supply.

For example :

If a commercial bank gains deposits of 1 crore and this leads to a final money supply of 10 crore, the money multiplier would be 10.

That is,

Therefore, the money multiplier decreases if banks increase their desired reserve ratio

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d≈7.07in

step-by-step explanation: