If the Fed Increases the Required Reserve Ratio, How Will

question 191

Multiple Choice

If the Fed increases the required reserve ratio, how will this affect excess reserves and the money supply?

• A)Both will increase.
• B)Excess reserves increase and the money supply decreases.
• C)Both will decrease.
• D)Excess reserves decrease and the money supply increases.

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Definitions:

Independent Carmakers

Automobile manufacturers that operate independently, not owned by or affiliated with the major automotive groups.

Federal Economic Policies

The set of decisions made at the national government level that influence a country's economic activities, including taxation, spending, and monetary regulation.

19th Century

Refers to the years from 1801 to 1900, a period marked by significant industrial, social, and political changes worldwide.

Earliest Antitrust Act

Legislation aimed at promoting competition and preventing monopolies, often referring to the Sherman Antitrust Act of 1890 in the United States.