Which of the Following Statements About Reserve Requirements Is True

question 42

Multiple Choice

Which of the following statements about reserve requirements is true?

• A)Reserve requirements apply to the M1 and M2 money supply.
• B)Reserve requirements are the most important factor in bank lending.
• C) Reserve requirements do not change very often.
• D) If reserve requirements are low, banks must keep back more money and therefore have less to lend.

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Definitions:

Munchausen Syndrome

Munchausen Syndrome is a psychiatric disorder wherein individuals purposely feign disease, illness, or psychological trauma to draw attention, sympathy, or reassurance to themselves.

Somatic Symptom Disorder

A mental disorder characterized by an excessive focus on physical symptoms, such as pain or fatigue, that causes major emotional distress and difficulties in functioning.

Factitious Disorder

A mental disorder in which a person acts as if they have a physical or mental illness when they are not really sick, to assume the sick role and gain medical attention.

Body Dysmorphic Disorder

A mental health condition where a person obsessively focuses on a perceived flaw in appearance, often not noticeable to others.