"An Increase in the Reserve Requirement Is a Tax Increase

question 4

Essay

"An increase in the reserve requirement is a tax increase on banks." Do you agree or disagree with this statement? Why?

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Definitions:

Quantity Supplied

The total amount of a product that producers are willing and able to sell at a given price over a specified period.

Price Rise

An increase in the general level of prices for goods or services over a period of time.

Elasticity Coefficient

A measure of how much the quantity demanded or supplied of a good changes in response to a change in price.

Price Range

The spectrum of prices at which a particular good or service is sold, varying from the lowest to the highest amounts customers are asked to pay.