When the Reserve Requirement Is Increased

question 5

Multiple Choice

When the reserve requirement is increased,

• A)required reserves are reduced.
• B)required reserves are converted to excess reserves.
• C)the discount rate will increase.
• D)excess reserves of depository institutions are reduceD.
• E)depository institutions that are loaned up will have more reserves to loan.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.