Which of the Following Is Not a Consequence of the Fed

question 10

Multiple Choice

Which of the following is not a consequence of the Fed changing the required reserve ratio?

• A)Changes in the ratio are easily incorporated into banks' routine management.
• B)Decreasing the ratio will increase excess reserves.
• C)Increasing the ratio will decrease the amount of reserves banks have to loan.
• D)Changes in the ratio effectively places a tax on banks' deposit taking and lending activities.

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