Suppose Banks Decide to Hold More Excess Reserves Relative to Deposits.Other

question 66

Multiple Choice

Suppose banks decide to hold more excess reserves relative to deposits.Other things the same,this action will cause the

• A)money supply to fall.To reduce the impact of this the Fed could lower the discount rate.
• B)money supply to fall.To reduce the impact of this the Fed could raise the discount rate.
• C)money supply to rise.To reduce the impact of this the Fed could lower the discount rate.
• D)money supply to rise.To reduce the impact of this the Fed could raise the discount rate.

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Definitions:

Self-Contradictory

Describing a statement or situation that contains elements that are logically inconsistent with each other.

Grammatical Construction

The arrangement and relationship of words, phrases, and clauses in sentences, adhering to the rules of a language.

Necessarily False

A statement or proposition that cannot be true under any circumstances.

Probably True

A statement or idea that is likely to be correct or accurate based on the available evidence.