The Fed Rarely Changes the Reserve Requirement Because

question 65

Multiple Choice

The Fed rarely changes the reserve requirement because:

• A) very small changes to the reserve requirement cause very large changes to the overall money supply.
• B) the money supply is usually well-suited to the needs of the economy.
• C) changing the reserve requirement does not typically have a large enough effect on the overall money supply.
• D) None of these are true.

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Definitions:

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