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Q: What best explains why rising the required reserve ratio results in a decrease in the money supply?
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What best explains why raising the required reserve ratio results in a decrease in the money supply?

When the required reserve ratio is high, must loan out a smaller portion of their reserves, resulting in fewer loans.


Which of the following best explains why raising the required reserve ratio results in a decrease in the money supply?

When the required reserve ratio is high, banks must loan out a smaller portion of their reserves, resulting in fewer loans.


Why is raising the required reserve ratio results in a decrease in the money supply?

When the required reserve ratio is high, banks must loan out a smaller portion of their reserves, resulting in fewer loans.


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The shape of a plane's wings causes air to accelerate in passing over the wing. This acceleration comes via a decrease in the random, thermal motion of the air molecules. This decrease in random, thermal motion results in a decrease in pressure. Therefore the air pressure is lower on the top of the wings than on the bottom so there is a net upward force on the wings. This is what is known as the Bernoulli principle and explains how planes can fly.


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