Other Things Equal, If the Required Reserve Ratio Was Lowered

question 51

Multiple Choice

Other things equal, if the required reserve ratio was lowered,

• A) banks would have to reduce their lending.
• B) the size of the monetary multiplier would increase.
• C) the actual reserves of banks would increase.
• D) the federal funds interest rate would rise.

Grasp the concept of discretion given to managers of profit centers.

Comprehend the impact of outsourced services on company operations and profits.

Identify the considerations involved in setting transfer prices.

Understand how transfer prices affect the buying and selling decisions within a company.

---

Definitions:

Tax Rate

The amount of tax people are required to pay per unit of whatever is being taxed.

Excise Tax

A tax levied on specific goods, services, or transactions, such as tobacco, alcohol, and fuel, usually to discourage consumption or raise government revenue.

Supply Curve

A graphical representation of the supply schedule, showing the relationship between quantity supplied and price.

Demand Curve

A graphical representation of the demand schedule, showing the relationship between quantity demanded and price.