A Lowering of the Required Reserve Ratio Might Not Expand

question 88

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..
• E) borrowers expand their borrowing because of the lower interest rates that banks offer.

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