If the Federal Reserve Is Currently Paying 0

question 26

Multiple Choice

If the Federal Reserve is currently paying 0.75% interest on bank reserves, but then increases that interest rate to 1%, banks may decide to hold ______ reserves, and the money supply may _____.

• A)more; increase
• B)more; decrease
• C)fewer; increase
• D)fewer; decrease

---

Definitions:

First-borns

Refers to individuals who are the eldest child in their family, often associated with specific psychological and social traits.

Early Memories

Recollections of events from the earliest part of one's life, which can significantly influence one’s personality and psychological development.

Depressed Persons

Individuals experiencing a prolonged period of sadness or despondency, often accompanied by other symptoms such as changes in sleep, appetite, and energy level.

Abandonment

A psychological feeling or condition whereby an individual experiences a sense of loss, emptiness, or desertion.