When the Fed raises the required reserve ratio, the banks' excess reserves ________ and the money supply ________. Group of answer choices increase; remain constant remains constant; decreases increase; increases decrease; decreases

When the Fed raises the required reserve ratio, the banks' excess reserves and the money supply . Group of answer choices increase; remain constant remains constant; decreases increase; increases decrease; decreases

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

When the Fed raises the required reserve ratio, the banks' excess reserves ________ and the money supply ________.

Group of answer choices

increase; remain constant

remains constant; decreases

increase; increases

decrease; decreases

Definition Definition Minimum amount that a commercial bank must hold in liquid assets in order to fulfill central bank regulations.

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