Table 142 Monetary Aggregates of the U Assume an Original Balance Sheet: If the Fed Changes the Item

question 131

Multiple Choice

Table 14.2 Monetary Aggregates of the U.S.Financial System
$\begin{array}{|l|r|}\hline\text { Item } & \text { Amount } \\\hline \text { Cash held by public } & \text { \$100billion } \\\hline\text { Transactions deposits } & \text { \$300billion } \\\hline\text { Required reserves } & \text { \$30billion } \\\hline\text { Excess reserves } & \text { \$0billion } \\\hline \text { U.S. bonds held by public } & \$ 475 \text { billion }\\\hline \end{array}$

Assume an original balance sheet: If the Fed changes the required reserve ratio in Table 14.2 to 15 percent,the lending capacity of the system will eventually

• A)Increase by $100 billion.
• B)Increase by $15 billion.
• C)Decrease by $100 billion.
• D)Decrease by $1.5 billion.

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