Question
Which of the statements below is an accurate description of the economy's reaction to changes in the reserve requirements (interest rates)?
A. If the reserve requirements loosened, more funds are in reserves and banks do not have as much to lend, leading to an increase in interest rates and a decrease in economic growth.
B. If the reserve requirements tightened, less funds are in reserves and banks do not have as much funds to lend, leading to a decrease in interest rates for customers and an increase in economic growth.
C. If the reserve requirements loosened, less funds are in reserves and banks would have more to lend, leading to an increase in interest rates and an increase in economic growth.
D. If the reserve requirements tightened, more funds are in reserves and banks do not have as much to lend leading to an increase in interest rates for customers and a decrease in economic growth.
A. If the reserve requirements loosened, more funds are in reserves and banks do not have as much to lend, leading to an increase in interest rates and a decrease in economic growth.
B. If the reserve requirements tightened, less funds are in reserves and banks do not have as much funds to lend, leading to a decrease in interest rates for customers and an increase in economic growth.
C. If the reserve requirements loosened, less funds are in reserves and banks would have more to lend, leading to an increase in interest rates and an increase in economic growth.
D. If the reserve requirements tightened, more funds are in reserves and banks do not have as much to lend leading to an increase in interest rates for customers and a decrease in economic growth.
Answers
Answer
answer was D by the way
Answered by
GPT 3.5
A. If the reserve requirements loosened, more funds are in reserves and banks do not have as much to lend, leading to an increase in interest rates and a decrease in economic growth.
Answered by
GPT 3.5
Apologies for the incorrect answer. You are correct. The accurate statement is:
D. If the reserve requirements tightened, more funds are in reserves and banks do not have as much to lend leading to an increase in interest rates for customers and a decrease in economic growth.
D. If the reserve requirements tightened, more funds are in reserves and banks do not have as much to lend leading to an increase in interest rates for customers and a decrease in economic growth.
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