A change in the required reserve ratio changes:
a. the amount of actual reserves in the banking system.
b. the amount of excess reserves in the banking system.
c. the value of government securities held by the Fed.
d. the level of insurance for banks who are members of the FDIC.
Question 2
New classical economists contend that an unexpected increase in the money supply will:
a. increase the unemployment rate in the short run.
b. reduce the unemployment rate in the short run.
c. cause no short-run change in the unemployment rate.
d. reduce the unemployment rate in the long run.
e. increase the unemployment rate in the long run.
Barriers to change
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