1. To determine reserves, banks and the Federal Reserve use: a. an agile accounting reserve system b. a contemporary accounting reserve system c. a lagged accounting reserve system d. none of the above

2. Some of the effects of capital requirements on the bank's operating policies could be all of the following except:

a. the bank's assets, especially those that require a greater reserve, increase capital

b. increase the prices of riskier loans

c. changing the capital mix or capital structure to one of higher internal capital versus external capital

d. change the position of the assets, having fewer high-risk assets