If the Fed Raised the Reserve Requirement, the Demand for Reserves

question 189

Multiple Choice

If the Fed raised the reserve requirement, the demand for reserves would

• A)increase, so the federal funds rate would fall.
• B)increase, so the federal funds rate would rise.
• C)decrease, so the federal funds rate would fall.
• D)decrease, so the federal funds rate would rise.

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Definitions:

Enron Collapse

A major corporate scandal involving the bankruptcy of the Enron Corporation in 2001, which was marked by extensive fraud and corruption.

Differential Piece Rate

A compensation system where an employee’s pay is based on the quantity of units produced, with different rates applied depending on the worker's productivity levels.

Standard Hour Plan

A compensation system where employees are paid a set rate for each unit of work completed within a standard timeframe.

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A pay system where employees are compensated based on the number of units they produce or tasks they complete, directly linking pay to output.