When the reserve requirement is decreased, the excess reserves of member banks are ________.
A. reduced, but the multiple by which the commercial banking system can lend is unaffected
B. reduced and the multiple by which the commercial banking system can lend is increased
C. increased and the multiple by which the commercial banking system can lend is reduced
D. increased and the multiple by which the commercial banking system can lend is increased
Answer: D
You might also like to view...
A reverse repurchase agreement of government securities by the Fed
A) permanently increases bank reserves. B) temporarily increases bank reserves. C) permanently reduces bank reserves. D) temporarily reduces bank reserves.
When a firm's marginal productivity of an input eventually declines as the quantity of input increases, then the production is experiencing
a. Diminishing returns to scale b. Diminishing marginal product c. Increasing returns to scale d. Increasing marginal product
To say that government intervenes in the economy to promote efficiency is to say that government is attempting to
a. create a more fair distribution of income. b. change the way in which the economic pie is divided. c. enlarge the economic pie. d. All of the above are correct.
Which of the following are the most likely short-run effects of an increase in government expenditures?
A) Increase/Increase/Increase B) Increase/Increase/Decrease C) Decrease/Increase/Increase D) Decrease/Decrease/Increase E) No change/Decrease/Increase