During Recessions,banks Typically Choose to Hold More Excess Reserves Relative

question 91

Multiple Choice

During recessions,banks typically choose to hold more excess reserves relative to their deposits.This action

• A)increases the money multiplier and increases the money supply.
• B)decreases the money multiplier and decreases the money supply.
• C)does not change the money multiplier,but increases the money supply.
• D)does not change the money multiplier,but decreases the money supply.

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Definitions:

Merchandise Trade Balance

The difference between a country's exports and imports of physical goods, indicating a trade surplus or deficit.

Refrigerators

Appliances used for keeping food and drinks cold, employing the principles of thermodynamics to transfer heat from the inside to the outside environment.

Shipping

The process of transporting goods and merchandise by land, air, or sea.

Balance of Payments

A record of all transactions made between entities in one country and the rest of the world over a specified period of time.