By decreasing the required reserve ratio, the Federal Reserve will
A. increase the money supply unless accompanied by a decrease in the discount rate.
B. increase the money supply unless banks hold on to excess reserves instead of lending them.
C. decrease the money supply by the amount of the initial change caused by the decreased required reserve ratio.
D. decrease the money supply by a multiple of the initial change caused by the decreased required reserve ratio.
B. increase the money supply unless banks hold on to excess reserves instead of lending them.
You might also like to view...
The equilibrium price in a market occurs where the:
A) market demand and the firms' average cost curves intersect. B) market supply and the firms' average cost curves intersect. C) market demand and the market supply curves intersect. D) market supply and the firms' revenue curves intersect.
Assuming an economy is already experiencing full employment, then it must produce more consumer goods and fewer capital goods if it wishes to experience greater rates of economic growth over time
a. True b. False Indicate whether the statement is true or false
Major economies around the world, such as the U.S. and Great Britain, are largely independent of one another, and thus their economic fluctuations bear little relationship to one another
Indicate whether the statement is true or false
A persistent surplus of pounds at a given fixed exchange rate (in dollars per pound) is evidence that the pound is ________ versus the dollar. This surplus can be reduced or eliminated through a ________ of the pound
A) overvalued; revaluation B) overvalued; devaluation C) undervalued; devaluation D) undervalued; revaluation