If the Level of Excess Reserves in the Banking System

question 81

Multiple Choice

If the level of excess reserves in the banking system drops suddenly, we might expect that the:

• A)discount rate would rise.
• B)federal funds rate would rise.
• C)required reserve ratio would fall.
• D)prime rate would fall.

---

Definitions:

Immediate Intervention

Urgent action taken to address a problem or crisis situation.

Chest Circumference

A measurement around the thorax or chest area, often used in medical assessments or to determine clothing sizes.

Measuring Tape

A flexible ruler used to measure size or distance, commonly made of cloth, plastic, or metal.

Head Circumference

A measurement around the largest part of the head, used in medical practice to assess brain growth and development, especially in infants and children.