The Required Reserve Ratio Is Determined by How

question 189

Multiple Choice

The required reserve ratio is determined by how:

• A) much lending banks wish to engage in.
• B) liquid banks wish to be.
• C) much the Fed determines banks must hold in reserves.
• D) active capital markets function.

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Definitions:

Aversive Event

An unpleasant or noxious event or situation that an individual seeks to avoid or escape.

Negative Reinforcement

A behavioral strategy involving the removal of an unpleasant stimulus to increase the likelihood of a desired behavior being repeated.

Demoted

The act of lowering someone's rank, status, or position, often as a result of performance evaluation or organizational restructuring.

Extinction

The process by which a species, breed, or family of organisms becomes permanently incapable of reproducing and therefore dies out.