A Lowering of the Required Reserve Ratio Might Not Expand

question 8

Multiple Choice

A lowering of the required reserve ratio might not expand the money supply if:

• A) tax rates are also lowered at the same time.
• B) tax rates are increased at the same time.
• C) borrowers are unwilling to borrow the new funds the banks have available for loans.
• D) borrowers are willing to borrow the new funds the banks have available for loans..

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Definitions:

Tall

Having a greater than average height.

Egocentrism

The psychological tendency to view the world from one's own perspective while having difficulty understanding other viewpoints.

Conservation

Conservation involves the protection, preservation, management, or restoration of natural environments, wildlife, and natural resources.

Preoperational

A stage in Piaget's theory of cognitive development, typically from ages 2 to 7, where children are unable to understand concrete logic and are instead focused on manipulation of symbols and language.