Assuming a Reserve Requirement of 10 Percent,if the Fed Sells

question 12

Multiple Choice

Assuming a reserve requirement of 10 percent,if the Fed sells $20 billion in bonds to the public,the lending capacity of the system will eventually

• A)Increase by $200 billion.
• B)Increase by $20 billion.
• C)Decrease by $200 billion.
• D)Decrease by $20 billion.

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Definitions:

Electrocardiogram

An Electrocardiogram (ECG) is a test that records the electrical activity of the heart to detect heart problems and monitor the heart's status.

Depolarization

The process by which a cell's resting membrane potential becomes less negative, leading to an action potential and potentially initiating a nerve impulse.

Atria

The heart's top two chambers that take in blood from the veins and transfer it to the ventricles.

Ventricles

Chambers of the heart that receive blood from the atria and expel it to the lungs and rest of the body, or, in brain anatomy, cavities filled with cerebrospinal fluid.