Which Statement Best Describes the Outcomes of a Decrease in the Reserve

question 83

Multiple Choice

Which statement best describes the outcomes of a decrease in the reserve requirement in a fractional reserve system?

• A) Both the money multiplier and the money supply increase.
• B) Both the money multiplier and the money supply decrease.
• C) The money multiplier increases, but the money supply decreases.
• D) The money multiplier decreases, but the money supply increases.

---

Definitions:

Racketeer Influenced and Corrupt Organizations Act

A U.S. federal law aimed at combating organized crime by allowing extended penalties for criminal acts performed as part of an ongoing criminal organization.

Predicate Offenses

Specific crimes that provide the grounds for charging someone with more serious offenses, such as racketeering or money laundering.

1933 Act

Officially known as the Securities Act of 1933, it is a U.S. federal law that requires issuers of securities to provide financial and other significant information to investors prior to issuing securities to the public.

Criminal Violation

A breach of laws established at a municipal, state, or federal level that may result in prosecution and punishment.