Because of the money-multiplier effect,the Fed changes reserve requirements _____.
A)only rarely
B)often
C)every month
D)every six months

Question

Quizplus · Accepted Answer

The Fed changes reserve requirements only rarely because frequent changes can cause instability in the banking system and the broader economy. Adjusting reserve requirements is a powerful tool that affects the money supply and is used cautiously.

Because of the Money-Multiplier Effect,the Fed Changes Reserve Requirements _____