When the required reserve ratio 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 increased.
D. increased and the multiple by which the commercial banking system can lend is reduced.
C. increased and the multiple by which the commercial banking system can lend is increased.
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A bakery can produce either cakes or cookies. If the price of cookies rises, then
A) the supply curve of cake shifts leftward. B) the supply curve of cake shifts rightward. C) there is a movement downward along the supply curve of cakes. D) there is a movement upward along the supply curve of cakes.
Whether or not a reduction in the budget deficit is a pro-growth measure depends on how the budget deficit shrinks
a. True b. False