Table 141 Monetary Aggregates of the U Assume an Original Balance Sheet: Refer to Table 14

question 106

Multiple Choice

Table 14.1 Monetary Aggregates of the U.S.Financial System
$\begin{array}{|l|r|}\hline\text { Item } & \text { Amount } \\\hline \text { Cash held by public } & \text { \$250billion } \\\hline\text { Transactions deposits } & \text { \$1,000billion } \\\hline\text { Required reserves } & \text { \$150billion } \\\hline\text { Excess reserves } & \text { \$0billion } \\\hline \text { U.S. bonds held by public } & \$ 1,000 \text { billion }\\\hline \end{array}$

Assume an original balance sheet: Refer to Table 14.1.If the Fed changes the required reserve ratio to 10 percent,ceteris paribus,the lending capacity of the system would eventually

• A)Decrease by $50 billion.
• B)Increase by $50 billion.
• C)Decrease by $500 billion.
• D)Increase by $500 billion.

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Definitions:

Exchange Products

The goods or services that are traded between parties in the course of business transactions.

Supply Chain

The supply chain encompasses all the steps involved in getting a product or service from the supplier to the customer, including production, handling, storage, and distribution.

Marketing Institutions

Organizations and entities, such as marketing agencies and trade associations, that support and influence the practice of marketing within an industry.

Final User

The end consumer who uses the product or service for its intended purpose, as opposed to those who might purchase for resale or to implement in another product.