The Large Increase in the Excess Reserves Held by the Commercial

question 110

Multiple Choice

The large increase in the excess reserves held by the commercial banking system during the second half of 2008,

• A) increases the likelihood of a sharp contraction in the money supply, which would increase the length and severity of the recession.
• B) increases the likelihood of a rapid increase in the money supply, potentially leading to future inflation.
• C) is merely a continuation of the trend present since 1990.
• D) reduces the ability of banks to extend additional loans.

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Definitions:

Coefficient of Variation

A statistical measure of the dispersion of data points in a data set, relative to its mean, expressed as a percentage.

Standard Deviation

A measure of the dispersion or spread of a set of data points relative to its mean, indicating how spread out the data points are.

Measures of Variability

Statistical metrics that describe the spread or dispersion within a data set, including range, variance, and standard deviation.

Coefficient of Variation

A normalized measure of the dispersion of a probability distribution or frequency distribution, often used to compare the degree of variation from one data series to another.