The the reserve requirement ratio, the the ultimate effect of any initial increase in the money supply.
A)lower; less
B)lower; greater
C)greater; less
D)lower; greater AND greater; less

Question

The               the reserve requirement ratio, the               the ultimate effect of any initial increase in the money supply.
A)lower; less
B)lower; greater
C)greater; less
D)lower; greater AND greater; less

Quizplus · Accepted Answer

The correct answer is D because a lower reserve requirement ratio means that banks are required to hold less reserves, which means that they can lend out more money. This will lead to a greater increase in the money supply.

The the Reserve Requirement