Multiple Choice
When a financial depository institution makes a loan it:
A) creates money.
B) borrows funds from the Federal Reserve.
C) converts vault cash to a demand deposit.
D) shifts funds from depositors' accounts to borrowers' accounts.
Correct Answer:
Verified
Correct Answer:
Verified
Q180: Decreasing the reserve requirement:<br>A) reduces excess reserves
Q181: Given the equation of exchange, MV=PQ, decreasing
Q182: Increasing excess reserves:<br>A) lowers the interest rate,
Q183: According to the equation of exchange, if
Q184: If a commercial bank has demand deposits
Q186: The required reserves for a bank with
Q187: If excess reserves in the depository institutions
Q188: A financial depository institution's reserve account balance
Q189: The Federal Reserve carries out monetary policy
Q190: If the money supply increased when the