In 1991,the Federal Reserve Lowered the Reserve Requirement from 12

question 119

Multiple Choice

In 1991,the Federal Reserve lowered the reserve requirement from 12 percent to 10 percent.Other things the same this should have

• A)increased both the money multiplier and the money supply.
• B)decreased both the money multiplier and the money supply.
• C)increased the money multiplier and decreased the money supply.
• D)decreased the money multiplier and increased the money supply.

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Definitions:

Corporation

A legal entity that is separate and distinct from its owners, capable of owning property, entering into contracts, and being sued or suing in its own name.

Accounting Purposes

The specific reasons or objectives for maintaining financial records and conducting financial analyses, including compliance, reporting, and decision-making.

Legal Purposes

Activities or actions that are undertaken in accordance with law and designed to effectuate legal ends.

Retained Earnings

The portion of net income not distributed as dividends but retained by the company to reinvest in its business or to pay debt.