When Banks Hold a Large Amount of Excess Reserves, Which

question 211

Multiple Choice

When banks hold a large amount of excess reserves, which of the following tools would the Fed most likely use to encourage banks to lend more of these excess reserves?

• A) lowering the reserve requirement
• B) lowering the interest rate it pays to banks on their reserves
• C) lowering the discount rate
• D) making an open market sale

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Definitions:

Straight Females

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Evolutionary Psychology

An approach in psychology that examines the ways in which human psychological traits and behaviors have been shaped by evolutionary processes.

Behavior Patterns

Repeated sets of actions or reactions exhibited by individuals in response to particular situations or stimuli.

Social Script

Preset, culturally understood sequences of behavior or events in a specific order, guiding interactions and expectations in social situations.