The Large Increase in the Excess Reserves Held by the Commercial

question 110

Multiple Choice

The large increase in the excess reserves held by the commercial banking system during the second half of 2008,

• A) increases the likelihood of a sharp contraction in the money supply, which would increase the length and severity of the recession.
• B) increases the likelihood of a rapid increase in the money supply, potentially leading to future inflation.
• C) is merely a continuation of the trend present since 1990.
• D) reduces the ability of banks to extend additional loans.

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Definitions:

Histamine

A compound found in body cells that plays a major role in allergic reactions, acting as a neurotransmitter and involved in the regulation of stomach acid.

Allergic Responses

Immune system reactions to certain substances, called allergens, that are normally harmless to most people.

Injured Tissues

This term refers to tissues in the body that have been damaged due to trauma, disease, or other factors, affecting their normal function.

Vertebrate's Circulatory System

The closed circulatory system found in vertebrates, where the heart pumps blood through vessels to deliver nutrients and oxygen to cells.