A Decrease in the Reserve Ratio Increases the

question 145

Multiple Choice

A decrease in the reserve ratio increases the

• A) amount of actual reserves in the banking system.
• B) amount of excess reserves in the banking system.
• C) number of government securities held by the Federal Reserve Banks.
• D) ratio of coins to paper currency in the economy.

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Definitions:

Temporary Accounts

Accounts that are closed at the end of each accounting period, including revenue, expense, and withdrawal accounts, used to track transactions for a particular period.