If the Fed Injects Reserves into the Banking System and They

question 35

Multiple Choice

If the Fed injects reserves into the banking system and they are held as excess reserves,then the money supply

• A)increases by only the initial increase in reserves.
• B)increases by only one-half the initial increase in reserves.
• C)increases by a multiple of the initial increase in reserves.
• D)does not change.

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Definitions:

Independent Variable

In an experiment, the variable that is manipulated by the researcher to observe its effect on the dependent variable.

Mixed-sex Groups

Social or working groups comprised of both male and female members.

Math Problems

Questions or exercises requiring mathematical solutions or manipulations.

Cohesiveness

The extent to which members of a group are attracted to each other and motivated to stay in the group.