A Decrease in the Required Reserve Ratio Would Be

question 122

Multiple Choice

A decrease in the required reserve ratio would be

• A) a restrictive policy because it lowers the amount of total reserves in the banking system.
• B) a restrictive policy because it lowers the amount of excess reserves in the banking system.
• C) an expansionary policy because it raises the amount of required reserves in the banking system.
• D) an expansionary policy because it raises the amount of total reserves in the banking system
• E) an expansionary policy because it raises the amount of excess reserves in the banking system.

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Definitions:

Units

A basic measure of the quantity of a product or service produced or sold.

Sold

The completion of a transaction where goods or services are exchanged for money.

Conversion Cost

The combined costs of direct labor and manufacturing overhead required to convert raw materials into finished products.

November

The eleventh month of the year in the Gregorian calendar, usually consisting of 30 days.