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LUCKY_DIMON [66]
3 years ago
11

In a fractional-reserve banking system, an increase in reserve requirements

Business
1 answer:
lidiya [134]3 years ago
8 0

Answer:

B. Decreases both the money multiplier and the money supply

Explanation:

An increase in reserve requirement decreases the amount of excess reserves in the banking system. This decrease means that there will also be less money for banks to loan out. this will lead to a reduction in money supply. The money multiplier on the other hand is the how a small deposit can result in a greater increase in money supply in the economy. Money multiplier will also decrease in this case. This is how;

Money multiplier = 1 / reserve requirement .

Based on above equation, if reserve requirement goes up, the overall; fraction  will be smaller hence a decrease in money multiplier.

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Answer:

The correct answer is B.

Explanation:

Giving the following information:

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<h3>♫ - - - - - - - - - - - - - - - ~Hello There!~ - - - - - - - - - - - - - - - ♫</h3>

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3 years ago
How do corporate bonds affect the economy
zheka24 [161]

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Bonds affect the U.S. economy by determining interest rates, which affect the amount of liquidity and determines how easy or difficult it is to buy things on credit or take out loans for cars, houses, or education

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MaRussiya [10]

A politician should be interested in the proportion of voters in his district.

The answer is true.

Explanation:

This is not only true for politician but also for any job which involves voting.

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