Which of the Following Is True

question 141

Multiple Choice

Which of the following is true?

• A)If the Fed wants to increase the money supply, it should increase the interest rate it pays banks on their excess reserves.
• B)When the Fed reduces the interest rate paid on excess reserves, it increases the incentive of commercial banks to hold excess reserves.
• C)If the Fed wants to reduce the future growth rate of the money supply, it could do so by increasing the interest rate it pays banks on excess reserves.
• D)When the Fed increases the interest rate it pays on excess reserves, this encourages banks to extend more loans and thereby increase the money supply.

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Definitions:

Evolutionary Adaptation

The process by which organisms adjust to their environment over time through changes in genetics, behavior, or physiology, enhancing their survival and reproduction.

Precautionary Principle

A strategy for approaching issues of potential harm when extensive scientific knowledge is lacking, emphasizing caution, pausing, and review before proceeding.

Global Climate System

The complex interconnection of Earth's atmosphere, oceans, land surfaces, and ice masses that determines global weather and climate patterns.

Decision Makers

Individuals or groups responsible for making choices that resolve problems or pursue opportunities.