Raising the Required Reserve Ratio __________ the Simple Deposit Multiplier

question 35

Multiple Choice

Raising the required reserve ratio __________ the simple deposit multiplier which will __________ the economy's money supply.

• A) raises; increase
• B) raises; decrease
• C) lowers; increase
• D) lowers; decrease

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Definitions:

Secondary Equity Offering

A process where a company that is already publicly traded issues additional shares to investors.

Market Value

The current market valuation at which a service or asset is being offered for sale or purchase.

Constant Annual Rate

A fixed annual interest rate applied over the life of an investment or loan, ensuring the rate does not change.

Market- Return

The amount of profit or loss generated by an investment over a given period, often expressed as a percentage of the investment's initial cost.