Moncy Supply Multiplier $=\frac{1+k}{k+r_r+r_e}$

where $k$ stands for the currency ratio, $r_r$ stands for the required reserves ratio, and $r_F$ stands for the excess reserves ratio.

Which of the following most accurately explains why the currency ratio, $k,$ may decrease?

The required reserves exceed bank reserves.

The public is holding more cash per deposit.

The public is holding less cash per deposit.

Suppose $(r_r+r_{lona})<mn\; id="EditorElement\_1796649">1</mn>$ and the value of the currency ratio, $k,$ decreases. Then the value of the money supply multiplier will

$-$ because the percentage change in the numerator is $$ than the percentage change in the denominator.