Multiple Choice
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.
Correct Answer:
Verified
Correct Answer:
Verified
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