When the Federal Reserve Board Increases the Reserve Requirements,the

question 32

Multiple Choice

When the Federal Reserve Board increases the reserve requirements,the:

• A)money supply declines.
• B)amount of money in circulation increases.
• C)amount of insurance for accounts increases.
• D)checks in the system are declared invalid.
• E)percentage of deposits that banks must hold in reserve declines.

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Definitions:

Probability Range

A span of values within which a random variable is expected to fall, governing the likelihood of different outcomes.

Risk Premium

The return in excess of the risk-free rate of return that investors demand for choosing a risky investment.

Small Companies

Businesses with relatively small market capitalization or revenues.