Ceteris Paribus, When the Fed Decreases the Supply of Reserves

question 30

Multiple Choice

Ceteris paribus, when the Fed decreases the supply of reserves, which of the following happens?

• A)There is a movement downward on the supply curve for real money balances.
• B)There is a movement upward on the supply curve for real money balances.
• C)The supply curve of real money balances shifts to the right.
• D)The supply curve of real money balances shifts to the left.

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Definitions:

Undue Burden

A standard adopted by courts to evaluate laws and regulations that place significant obstacles in the path of exercising a constitutional right.

Abortion

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Capital Punishment

A legal penalty in which a person is put to death by the state as a punishment for a crime.

Statutes

Laws enacted by a legislative body.