A Decrease in the Required Reserve Ratio Would Be

question 122

Multiple Choice

A decrease in the required reserve ratio would be

• A) a restrictive policy because it lowers the amount of total reserves in the banking system.
• B) a restrictive policy because it lowers the amount of excess reserves in the banking system.
• C) an expansionary policy because it raises the amount of required reserves in the banking system.
• D) an expansionary policy because it raises the amount of total reserves in the banking system
• E) an expansionary policy because it raises the amount of excess reserves in the banking system.