Which of the Following Statements Best Describes Why a Decrease

question 96

Multiple Choice

Which of the following statements best describes why a decrease in reserve requirements often results in an increase in the money supply?

• A) A decrease in reserve requirements gives banks more money to better determine their interest rates.
• B) A decrease in reserve requirements gives banks more money to pay off their debts.
• C) A decrease in reserve requirements gives banks more money to lend out.
• D) A decrease in reserve requirements gives banks more money to offer in dividend payments to their clients.
• E) A decrease in reserve requirements gives banks more money to reward their employees for meritorious financial ventures.

---

Definitions:

Prospective Memory

The sector of memory concerned with the ability to remember to implement future intended actions or recall set intentions for later execution.

Absent-Minded

Exhibiting forgetfulness or inattention, typically because of preoccupation with other matters.

Limbic System

A complex system of nerves and networks in the brain, involving several areas near the edge of the cortex concerned with instinct and mood.

Sociocultural Context

The environment that surrounds individuals, encompassing societal, cultural, and familial norms and values that shape behavior and perceptions.