If the Fed Lends to Member Banks, What Happens to Reserves

question 166

Multiple Choice

If the Fed lends to member banks, what happens to reserves and the money supply?

• A) Reserves increase and the money supply decreases.
• B) Both increase.
• C) Reserves decrease and the money supply increases.
• D) Both decrease.

---

Definitions:

Applicants

Individuals who apply for a position, program, or opportunity.

Different Ways

Various methods or approaches to achieving an objective or completing a task.

Cover Letter

A letter sent with, and explaining the contents of, another document or a parcel of goods.

Composition

The act or practice of creating written work, such as essays, reports, or books.