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Suppose the Federal Reserve Wanted to Reduce the Money Supply

Question 57

Multiple Choice

Suppose the Federal Reserve wanted to reduce the money supply without using open-market operations.It could try to get the public to ________ their currency-deposit ratio and ________ banks' reserve requirements,which would in turn change the banks' reserve-deposit ratio.


A) decrease; lower
B) decrease; raise
C) increase; lower
D) increase; raise

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