An Interesting Development That Happened in Late 2008, Relating to the Fed

question 117

Multiple Choice

An interesting development that happened in late 2008, relating to the Fed and bank reserves, is that the Fed:

• A) Reduced the reserve ratio drastically
• B) Required banks to hold more excess reserves
• C) Started paying interest on the banks' reserves
• D) Gave back all the reserves to the banks to hold as vault cash

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Definitions:

Norms

Shared expectations or rules of behavior that guide individuals' actions within a society or group.

Collective Violence

Violence committed by groups of people, often motivated by social, political, or economic objectives.

National Elections

Political processes where citizens vote to select public officials or decide on governmental policies at the country level.

Political Opportunities

The chances or openings available in a political system for people to influence policymaking, display dissent, or effect change.