An increase in ________ reduces the money supply since it causes the ________ to fall. A)...
Question:
An increase in _____ reduces the money supply since it causes the _____ to fall.
A) reserve requirements; monetary base
B) reserve requirements; money multiplier
C) margin requirements; monetary base
D) margin requirements; money multiplier
Bank Reserves:
The minimum amount of money or cash which a financial institution must have on the hand is called as Bank Reserves. The minimum amount is hold in hand by the financial institutions in order to meet the requirements of the central bank.
Answer and Explanation: 1
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Option B
Explanation
Reserve Requirements are the total amount of cash or fund which the bank should have. These requirements must...
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Get to know the central bank, understand its meaning, and learn what it actually does. Explore the main role and purposes of a central bank in a country.
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