An Increase in the Required Reserve Ratio by the Federal

question 53

Multiple Choice

An increase in the required reserve ratio by the Federal Reserve would:

• A) cause M1 to contract.
• B) cause M1 to expand.
• C) have no effect on M1 or M2.
• D) affect only M2, not M1.

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Definitions:

Null Hypothesis

A statement that assumes no effect or no difference in a statistical hypothesis test.

Intervention Group

The group in an experimental study that receives the treatment or intervention being tested, as opposed to a control group.

Study Group

A collection of individuals brought together to participate in a research study or to collectively study a particular subject.

Null Hypothesis

A statement used in statistics that proposes there is no significant difference or relationship between specified populations, any observed difference being due to sampling or experimental error.