When reserve requirements are increased, the:
a. excess reserves of commercial banks will decrease.
b. excess reserves of commercial banks will increase.
c. U.S. Treasury will have to borrow additional funds.
d. money supply will rise.
Question 2
Which of the following would cause the money supply in the United States to decrease?
a. An increase in reserve requirements
b. A decrease in the discount rate
c. A purchase of U.S. government bonds by the Federal Reserve
d. An increase in the world supply of gold
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