An Increase in the Excess Reserves Banks Want to Hold

question 154

Multiple Choice

An increase in the excess reserves banks want to hold, together with people depositing currency into their demand deposit accounts, would:

• A)​increase the money supply.
• B)​decrease the money supply.
• C)​leave the money supply unchanged.
• D)​have an indeterminate effect on the money supply.

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Definitions:

Monetary Growth

An increase in the amount of money in an economy, which can influence inflation, interest rates, and economic growth.

Real GDP

The measure of a country's economic output adjusted for price changes (inflation or deflation).

Average Price

The average price is a calculated central value of a range of prices for a given product, service, or asset over a specific time period.

United States

The United States is a federal republic composed of 50 states, a federal district, five major self-governing territories, and various possessions, known for its significant influence on global economics, politics, and culture.