When the Required Reserve Ratio Is Decreased

question 144

Multiple Choice

When the required reserve ratio is decreased:

• A)the excess reserves of member banks are reduced, but the money multiplier is not affected.
• B)the excess reserves of member banks are reduced, and the money multiplier is increased.
• C)the excess reserves of member banks are increased, but the money multiplier is not affected.
• D)the excess reserves of member banks are increased, and the money multiplier is increased.
• E)the excess reserves of member banks are reduced, and the money multiplier is decreased.

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Definitions:

Pressure Gradients

A differentiation in pressure that drives the movement of fluids or gases from areas of high pressure to areas of low pressure.

Osmotic Gradients

The difference in concentration of solutes across a semipermeable membrane, which drives the movement of water.

Breathing

The process of moving air in and out of the lungs to facilitate gas exchange with the internal environment, mainly by bringing in oxygen and flushing out carbon dioxide.

AV Node

AV Node (Atrioventricular Node) is a component of the heart's electrical system that delays the transmission of electrical impulses to the ventricles to ensure proper timing of heart contractions.