When the Fed Raises the Required Reserve Ratio, Then The

question 249

Multiple Choice

When the Fed raises the required reserve ratio, then the:

• A) ability of banks to make loans is restricted.
• B) ability of banks to make loans is enhanced.
• C) ability of banks to make loans is unaffected.
• D) interest rate that banks pay to the Fed to borrow money is increased.
• E) interest rate that banks pay to other banks to borrow money is increased.

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Definitions:

Legal Authority

The officially sanctioned power to make decisions, to direct others, or to enact laws or directives.

Manufacturer

An entity or business that produces goods on a large scale using raw materials and various processes, typically involving machinery and labor.

Marketing Channel

Pathways that products and services follow from producers to consumers, including intermediaries like wholesalers and retailers.

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Hand-knotted or woven rugs from the Middle East, Central Asia, and the Far East, known for their intricate patterns and craftsmanship.