If the Ratio of Reserves to Deposits (Rr) Increases, While

question 44

Multiple Choice

If the ratio of reserves to deposits (rr) increases, while the ratio of currency to deposits (cr) is constant and the monetary base (B) is constant, then:

• A) it cannot be determined whether the money supply increases or decreases.
• B) the money supply increases.
• C) the money supply decreases.
• D) the money supply does not change.

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Definitions:

Freedom to Farm Act

U.S. legislation passed in 1996 that aimed to reduce government control over farming operations and allow farmers more freedom in their planting decisions.

Countercyclical Payments

Government payments made to farmers and businesses to provide financial support during periods of economic downturn.

Food-Stamp Program

A government assistance program that provides low-income individuals and families with benefits to buy food.

Farm Products

Items derived from agricultural activities, including both plant-based foods and animal products, essential for human consumption and use.