In a Fractional-Reserve Banking System,an Increase in Reserve Requirements

question 122

Multiple Choice

In a fractional-reserve banking system,an increase in reserve requirements

• A)increases both the money multiplier and the money supply.
• B)decreases both the money multiplier and the money supply.
• C)increases the money multiplier,but decreases the money supply.
• D)decreases the money multiplier,but increases the money supply.

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Definitions:

Parliament

The supreme legislative body in a country, especially in those following the British system, composed of two houses: the upper house (Senate or House of Lords) and the lower house (House of Commons or House of Representatives).

Compromise

An agreement or a settlement of a dispute that is reached by each side making concessions.

Revolutionary War

The war of independence fought by the Thirteen American Colonies against British rule from 1775 to 1783, resulting in the founding of the United States of America.