In the Cause-Effect Chain Linking Changes in the Banks' Excess

question 286

Multiple Choice

In the cause-effect chain linking changes in the banks' excess reserves and the resulting changes in output and employment in the economy,

• A) a decrease in aggregate demand will increase output.
• B) an increase in the money supply will decrease the rate of interest.
• C) a decrease in excess reserves will increase the money supply.
• D) a decrease in the rate of interest will decrease aggregate demand.