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When the Fed Decreases the Required Reserve Ratio, Then The

Question 3

Multiple Choice

When the Fed decreases the required reserve ratio, then the:


A) ability of banks to make loans is restricted.
B) ability of banks to make loans is enhanced.
C) ability of banks to make loans is unaffected.
D) interest rate that banks pay to the Fed to borrow money is reduced.
E) interest rate that banks pay other banks to borrow money is decreased.

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