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

question 87

Multiple Choice

In the simple deposit expansion model,a decline in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that the Fed

• A)sold $200 in government bonds.
• B)sold $500 in government bonds.
• C)purchased $200 in government bonds.
• D)purchased $500 in government bonds.

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Definitions:

Leland Stanford

An American industrialist, politician, and founder of Stanford University, known for his significant contribution to the development of the California railroad system.

Eadweard Muybridge

A groundbreaking photographer and inventor who significantly contributed to the development of motion pictures through his study of animal locomotion using sequential photographs.

Photography

The art or practice of capturing images through the light on a light-sensitive surface, either digitally or on film.

Photograph

An image created by capturing light on a light-sensitive surface, traditionally through a chemical process on film, but now also commonly through digital sensors.