Question:

Economic-When the Fed increases the required reserve ratio, a bank's???thank you?

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When the Fed increases the required reserve ratio, a bank's

excess reserves are unaffected.

excess reserves are increased.

excess reserves are decreased.

required reserves are decreased.

b and d

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2 ANSWERS


  1. C - excess reserves are decreased (because of the increase needed in the required reserve amount)


  2. c) excess reserves are decreased.

    Increase in reserve requirement will mean that more cash should be stored as reserves than before.

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