Decreasing the Reserve Requirement Ratio Is

question 198

Multiple Choice

Decreasing the reserve requirement ratio is

• A) a contractionary policy because it lowers the amount of total reserves in the banking system.
• B) a contractionary policy because it lowers the amount of excess reserves in the banking system.
• C) an expansionary policy because it raises the amount of excess reserves in the banking system.
• D) an expansionary policy because it raises the amount of required reserves in the banking system.

---

Definitions:

Point Estimate

Represents a single value given as the best guess or most likely value of a population parameter based on sample data.

Sampling Error

The difference between a sample statistic used to estimate a population parameter and the actual but unknown value of the parameter.

Population Parameter

A numerical characteristic of a population, such as mean or standard deviation, that is usually unknown.

Proportion

In statistics, a proportion refers to the fraction of the total that exhibits a certain trait or characteristic.