Which of the following would tend to increase unemployment in the short run?
A)commercial banks calling in loans to build up their excess reserves
B)an increase in reserve requirements
C)an increase in the discount rate
D)all of the above

Question

Which of the following would tend to increase unemployment in the short run?
A)​commercial banks calling in loans to build up their excess reserves
B)​an increase in reserve requirements
C)​an increase in the discount rate
D)​all of the above

Quizplus · Accepted Answer

All three options would tend to decrease the amount of money available for lending and borrowing, putting downward pressure on economic activity and leading to a higher level of unemployment in the short run. Commercial banks calling in loans and an increase in reserve requirements both reduce the amount of money banks have available to lend, while an increase in the discount rate would make it more expensive for banks to borrow money from the central bank.

Which of the Following Would Tend to Increase Unemployment in the Short