Multiple Choice
Consider a policy that decreases the required reserve ratio in a country such as the United States.What type of policy is this?
A) It is a contractionary policy because it lowers the amount of total reserves in the banking system.
B) It is a contractionary policy because it lowers the amount of excess reserves in the banking system.
C) It is an expansionary policy because it raises the amount of total reserves in the banking system.
D) It is an expansionary policy because it raises the amount of excess reserves in the banking system.
Correct Answer:

Verified
Correct Answer:
Verified
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