The Federal Reserve could (decrease - hold constant - increase) the amount of money circulating in the economy by reducing the reserve ratio. However, doing this could increase the risk of banks becoming insolvent if (a bank run - a bank holiday - a recession - an audit) should occur. 2- The U. S. dollar is currently considered to be (fiat money - commodity-backed money) 3- In the liquidity-preference model, if the slope of the money demand curve is relatively steep, a one percent increase in the interest rate will cause a (smaller decrease - smaller increase greater decrease - greater increase) in the quantity of money demanded when compared to a one percent increase in the interest rate with a less steep money demand curve.