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:

Initial Screening

The initial review process used in various contexts like employment or investment to determine if an applicant or opportunity meets basic criteria.

Cash Payback Method

A method in capital budgeting used to determine the duration needed for an investment to produce cash flows enough to reimburse the initial cost of the investment.

Average Rate of Return Method

A method of evaluating a project or investment by determining the average annual rate of return it will generate.

Net Present Value Method

A method of evaluating investments by calculating the present value of expected future cash flows, subtracting the initial investment.