By Requiring Banks to Keep More Money in Their Vaults

question 52

Multiple Choice

By requiring banks to keep more money in their vaults, the Federal Reserve Board can effectively pull money out of the economy, thereby slowing ________. Conversely, by loosening reserve requirements, the Federal Reserve Board can pump more money into the economy, which usually leads to ________ interest rates and ________ access to loans.

• A) inflation; lower; easier
• B) inflation; higher; harder
• C) deflation; lower; easier
• D) deflation; higher; harder
• E) inflation; higher; easier

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Definitions:

Nomothetic

Nomothetic refers to an approach in psychological and social science research that focuses on identifying general laws that apply across individuals, as opposed to studying the unique aspects of individuals.

Idiographic

An approach focusing on the unique aspects of individuals, emphasizing personal experiences and subjective perceptions.

Single-Parent Families

Describes families headed by one parent, who is responsible for raising one or more children.

Two-Parent Families

A family structure that consists of two adults who are in a committed relationship and are raising their children together.