During recessions, banks typically choose to hold more excess reserves relative to their deposits. this action
a. increases the money multiplier and increases the money supply.
b. decreases the money multiplier and decreases the money supply.
c. does not change the money multiplier, but increases the money supply.
d. does not change the money multiplier, but decreases the money supply.

b. decreases the money multiplier and decreases the money supply.

Explanation:

Commercial banks keep to some minimum amounts in the bank as per the central bank's requirements. This money cannot be loaned out to customers. This amount of money is known as bank reserve; it caters for large and unexpected customer withdrawals.  Reserves must stay in the bank's volt or with the central bank. Excess reserves are the additional money banks hold over and above the required minimum.

After the 2008 financial crises, the Fed started paying interest on the bank's reserves. At recession, the interest rate tends to fall. Banks would prefer to hold excess reserves and earn a small but guaranteed income from the Fed. During recessions, lending to the public becomes more risk to the banks; hence, they opt to earn interests from the excess reserves.

When banks are lending less than required, they are decreasing the money multiplier and money supply. For example, if a bank is required to keep a reserve of 10 percent, it should loan out 90 per cent, meaning it has increased the money supply in the market as expected. But should the bank hold excess reserves say 20 per cent, then it can only loan out 80 per cent which reduces the rate multiplier effect and money supply.

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

answer; i believe its (d) intrinsic;