If the Fed Increases the Required Reserve Ratio, How Will

question 191

Multiple Choice

If the Fed increases the required reserve ratio, how will this affect excess reserves and the money supply?

• A)Both will increase.
• B)Excess reserves increase and the money supply decreases.
• C)Both will decrease.
• D)Excess reserves decrease and the money supply increases.

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Definitions:

Working Memory

A cognitive network with a bounded potential, charged with keeping information temporarily for processing needs.

New Facts

Recently discovered or recognized pieces of information that are true or proven to be valid.

Procedural Memory

A type of long-term memory specifically concerned with the acquisition of skills and habits, enabling individuals to perform certain tasks without conscious awareness.

Play The Piano

The act of performing music using a keyboard instrument where sound is produced by hammers striking strings.