If the Fed Increases Reserve Requirements,the Demand for Reserves ________

question 93

Multiple Choice

If the Fed increases reserve requirements,the demand for reserves ________ and the equilibrium federal funds rate ________.

• A) increases; drops
• B) decreases; rises
• C) decreases; drops
• D) increases; rises

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Definitions:

Natural Resources

Materials or substances occurring in nature which can be exploited for economic gain, such as minerals, forests, water, and fertile land.

Lower-Income Countries

Nations with relatively low levels of economic resources and standards of living, often measured by gross domestic product (GDP) per capita.

Absolute Poverty

The amount of money needed in a particular country to meet basic needs of food, shelter, and clothing.

United Nations

An international organization founded in 1945 to promote peace, security, and cooperation among countries.