Question: 1. Suppose the Feds decide to decrease reserve requirements, which of the following will occur? A. The Federal Funds rate will decrease, expanding the economy.

1. Suppose the Feds decide to decrease reserve requirements, which of the following will occur?

A. The Federal Funds rate will decrease, expanding the economy.

B. The Federal Funds rate will decrease, contracting the economy.

C. The Federal Funds rate will increase, expanding the economy.

D. The Federal Funds rate will increase, contracting the economy.

2. Suppose the Feds decide to decrease reserve requirements, which of the following is likely to occur?

A. Unemployment will increase and inflation will increase

B. Unemployment will increase and inflation will decrease

C. Unemployment will decrease and inflation will increase

D. Unemployment will decrease and inflation will decrease

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