If the Fed Increases the Required Reserve Ratio at a Time

question 25

Multiple Choice

If the Fed increases the required reserve ratio at a time when banks are holding excess reserves,then:

• A)the Fed's aim is to increase the money supply.
• B)banks are likely to lend out more money than they would if the Fed left the reserve ratio alone.
• C)banks are likely to earn higher profits than they would.
• D)the money supply will not increase as much as it would if the Fed left the reserve ratio alone.
• E)the Fed's aim is to conduct open market operations without changing the money supply.

---

Definitions:

Psychogenic Causes

Refers to psychological factors that lead to physical symptoms or diseases, without any traceable physical cause.

Lycanthropy

A psychiatric condition in which a person believes they can transform into a wolf or that they have transformed into one, a rare delusion.

Wolves

Large carnivores belonging to the canine family, known for their social structure and roles in ecosystems as apex predators.

Psychopathology

The study of mental disorders, including their symptoms, etiology (causes), and treatment.