The Larger Is the Reserve Ratio

question 179

Multiple Choice

The larger is the reserve ratio

• A) the greater is the increase in the money supply for an increase in bank deposits.
• B) the more likely it is there will be currency drains.
• C) the smaller is the maximum potential money multiplier.
• D) the more difficult it is for the Federal Reserve to control the money supply.

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Definitions:

Psychological Sensation

The subjective experience or perception of a stimulus through the mind's interpretation of sensory information.

Physical Stimulus

A tangible or material factor that can prompt a physical reaction in an organism.

Just-Noticeable Difference

The smallest change in stimulus intensity that can be detected, underlining the threshold at which a change is perceptible.

Detectably Different

The threshold at which a change in a variable or condition is perceptible or measurable from its previous state.