An Increase in the Reserve Requirement from 20 Percent to 25

question 39

Multiple Choice

An increase in the reserve requirement from 20 percent to 25 percent is most likely to:

• A)reduce total deposits in the banking system.
• B)reduce excess reserves and the deposit expansion multiplier.
• C)increase the money supply.
• D)reduce the amount of reserves required.
• E)increase total deposits and the deposit expansion multiplier.

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Definitions:

Utilitarian View

An ethical perspective that suggests actions are right if they are beneficial or bring the greatest good to the greatest number of people.

Ethical Behaviour

Conduct that is in accordance with accepted principles of right or wrong governing the conduct of a profession.

Results-Oriented

A focus on achieving specific outcomes or goals, emphasizing the end result rather than the process used to get there.

Lasting Friendship

A deep and enduring relational bond characterized by mutual affection, trust, and support over a long period.