To Decrease the Money Supply Using the Reserve Requirements, What

question 146

Multiple Choice

To decrease the money supply using the reserve requirements, what would the Fed typically do?

• A) raise the reserve requirement for banks
• B) reduce the reserve requirement for banks
• C) make each bank voluntarily set its own reserve levels
• D) let each bank get less currency from the Treasury

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Definitions:

Net Income

The income a company retains after deducting all costs, taxes, and expenses from its total revenue.

Discretionary Fixed Costs

Discretionary fixed costs are fixed expenses that can be adjusted or eliminated without directly impacting the short-term productivity of the business, such as advertising or research and development costs.

High-Low Method

An accounting technique used to estimate the variable and fixed components of a company's costs, based on the highest and lowest levels of activity.

Generally Accepted Accounting Principles

A collection of commonly-followed accounting rules and standards for financial reporting.