A Decrease in the Quantity of Reserves Supplied to Commercial

question 449

Multiple Choice

A decrease in the quantity of reserves supplied to commercial banks could be the result of

• A) the sale of government securities by the Federal Reserve.
• B) an increase in the exchange rate.
• C) a decrease in the governmentʹs budget deficit.
• D) a decision by U.S. households to hold less currency.

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Definitions:

Inventory Account

An account on the balance sheet that reports the value of a company's products that are ready for sale but have not yet been sold.

Statement Of Income

A financial statement showing a company's revenues, expenses, and net profit or loss over a specific period.

Purchase Returns

Goods returned by the buyer to the seller due to defects, excess supply, or other reasons.