The Effect of an Increase of Required Reserves by the Fed

question 119

Multiple Choice

The effect of an increase of required reserves by the Fed is:

• A)a decrease in loanable funds of depository institutions
• B)a decrease in interest rates
• C)usually an increase in vault cash
• D)to stimulate activity in the home construction field

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Definitions:

Consumer Income

The total amount of income received by consumers, affecting their purchasing power and demand for goods and services.

Fast Food

Quick service food, often pre-prepared or quickly made, served in restaurants or outlets for rapid consumption.

Substitutes

Alternative products or services that can fulfill the same need or function as another in the eyes of consumers.

DVD Players

Electronic devices designed to play DVDs, compact discs often containing movies or other video content.