If the Required Reserve Ratio Was Increased, Then

question 61

Multiple Choice

If the required reserve ratio was increased, then:

• A)​the money supply would tend to decrease, but the outstanding loans of banks would tend to increase.
• B)​both the money supply and the outstanding loans of banks would tend to decrease.
• C)​the money supply would tend to increase, but the outstanding loans of banks would tend to decrease.
• D)​both the money supply and the outstanding loans of banks would tend to increase.

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Definitions:

Passive Approach

An investment strategy that involves minimal buying and selling actions, often associated with index fund investing.

Aggregate Supply

The complete inventory of products and services that enterprises in a domestic economy aim to sell throughout a specified period.

Active Policy Lags

The delays in the implementation and effectiveness of policy measures due to administrative, decision-making, or economic factors.

Economy

The system or range of economic activities in a region, country, or community, including the production, consumption, and trade of goods and services.