Answered: If the required reserve ratio were to…

If the required reserve ratio were to decline, what effect would this have on the money supply? money supply would rise money supply would fall money supply stays constant cannot be determined

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter25: Money, Banking, And The Federal Reserve System

Section: Chapter Questions

Problem 14P

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Question

If the required reserve ratio were to decline, what effect would this have on the money supply?

		money supply would rise
		money supply would fall
		money supply stays constant
		cannot be determined

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

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