If the Fed Were to Increase the Required Reserve Rate

question 8

Multiple Choice

If the Fed were to increase the required reserve rate from ten percent to twenty percent, the simple deposit expansion multiplier would:

• A) double.
• B) increase by 10 percent.
• C) decrease by a factor of ten.
• D) be half as large as it was before the increase.

---

Definitions:

Fundamental Power Frequency

The primary frequency at which an electrical system is designed to operate, typically 50 or 60 Hz in most regions.

Harmonics

Oscillations at integer multiples of the fundamental frequency in an electrical signal, often considered unwanted distortions.

True-RMS Ammeter

An instrument that accurately measures the current in a circuit by calculating the root mean square of the waveform, suitable for both AC and non-sinusoidal conditions.

Harmonic Distortion

A distortion that occurs in a signal when there are frequencies in the output that are integer multiples of the fundamental frequency, affecting the signal's waveform.