In the Simple Deposit Expansion Model,a Decline in Checkable Deposits

question 84

Multiple Choice

In the simple deposit expansion model,a decline in checkable deposits of $500 when the required reserve ratio is equal to 10 percent implies that the Fed

• A)sold $500 in government bonds.
• B)sold $50 in government bonds.
• C)purchased $50 in government bonds.
• D)purchased $500 in government bonds.

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Definitions:

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A theory suggesting that social behavior is the result of an exchange process to maximize benefits and minimize costs in relationships.

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