Which of the Following Will Result in a Decrease in the Money

question 88

Multiple Choice

Which of the following will result in a decrease in the money supply?

• A) an increase in reserve requirements
• B) an increase in the discount rate
• C) a decrease in reserve requirements
• D) both an increase in reserve requirements and an increase in the discount rate

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Definitions:

Shortage

A scenario where the market's supply of a specific product or service is outstripped by consumer demand.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to a balance where there is no tendency for the price to change.

Price Ceiling

A regulatory limit placed on the amount that can be charged for commodities and services, to prevent market imbalances.

Equilibrium Price

The price at which the quantity of a good or service supplied matches the quantity demanded, leading to market stability.