The Effect of an Increase of Required Reserves by the Fed

question 128

Multiple Choice

The effect of an increase of required reserves by the Fed is

• A) a decrease in loanable funds of depository institutions.
• B) a decrease in interest rates.
• C) an increase of excess reserves.
• D) to stimulate activity in the home construction field.

---

Definitions:

Acellular

Consisting of, or pertaining to, non-cellular structure, lacking cells.

Viruses

Microscopic infectious agents that replicate only inside the living cells of organisms, capable of causing a wide range of diseases.

Photosynthetic Bacteria

Bacteria capable of photosynthesis, a process that converts light energy into chemical energy, thereby producing oxygen as a by-product, crucial for earth's oxygen supply.

Chemosynthetic Bacteria

Microorganisms that obtain energy by converting inorganic molecules to organic matter, independent of sunlight.