The Sharp Increase in the Excess Reserves Held by the Commercial

question 166

Multiple Choice

The sharp increase in the excess reserves held by the commercial banking system since the second half of 2008 increases the potential for

• A) a sharp contraction in the money supply, which is likely to increase the length and severity of the recession.
• B) a rapid increase in the money supply, potentially leading to inflation.
• C) a gradual increase in the money supply, following the trend of the previous decade.
• D) a reduction in the ability of banks to extend additional loans.

---

Definitions:

Substance Use Disorder

A complex condition in which there is uncontrolled use of a substance despite harmful consequences, leading to clinically significant impairment or distress.

Harm Reduction

A set of practical strategies aimed at minimizing negative health, social, and legal impacts associated with drug use, sexual activity, and other potentially harmful behaviors.

Illicit Drug Use

The unauthorized or illegal use of substances, including drugs not sanctioned by legal authorities.

Low Risk Drinking Guidelines

are recommendations provided to minimize the health and safety risks associated with alcohol consumption, including limits on daily and weekly intake.