A Decrease in the Reserve Requirement Would

question 37

Multiple Choice

A decrease in the reserve requirement would:

• A)decrease excess reserves and reflect an expansionary monetary policy.
• B)decrease excess reserves and reflect a contractionary monetary policy.
• C)increase excess reserves and reflect an expansionary monetary policy.
• D)increase excess reserves and reflect a contractionary monetary policy.

---

Definitions:

Misinformation Effect

A phenomenon where a person's recollection of an event can be influenced by misleading information presented after the event.

State-dependent Memory

The phenomenon where information learned in a particular physiological or psychological state is more easily recalled when in the same state.

Retroactive Interference

The phenomenon that occurs when newly learned information interferes with the recall of information learned previously.

Context Reinstatement

A cognitive process that involves reconstructing the circumstances or environment present during learning or an event to aid memory recall.