If the Fed Increases the Required Reserve Ratio, How Will

question 191

Multiple Choice

If the Fed increases the required reserve ratio, how will this affect excess reserves and the money supply?

• A)Both will increase.
• B)Excess reserves increase and the money supply decreases.
• C)Both will decrease.
• D)Excess reserves decrease and the money supply increases.

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Rationale

The reasoning or justification behind a decision, strategy, or action.

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The practice of marketing oneself and one's career as brands, emphasizing a unique combination of skills, experiences, and personality.

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Essential or required in a particular situation or for a specific purpose.

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The capacity to have an effect on the character, development, or behavior of someone or something, or the outcome itself.