Use the Following to Answer Questions

question 209

Multiple Choice

Use the following to answer questions .
Exhibit: Fed Sells Bonds
Scenario 2: Fed sells bonds to Henry Hyde
Consider a banking system in which the reserve requirement is 10%, banks try not to hold excess reserves, consumers and firms hold money only in the form of checking account balances, and all loan proceeds are spent. Suppose initially all banks in the system are loaned up. Now, suppose that the Fed sells a $50,000 bond to Henry Hyde, who pays for the bond by writing a check drawn against Jekyll Bank.
-(Exhibit: Fed Sells Bonds) Once the full impact of the Fed's open market sale works its way through the banking system, what is the maximum change on the money supply as a result of these two events?

• A) Money supply rises by $5,000.
• B) Money supply rises by $500,000.
• C) Money supply falls by $50,000.
• D) Money supply falls by $500,000.

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Definitions:

Family Dynamics

The pattern of interactions, relationships, and behaviors among members of a family, influenced by factors like roles, communication styles, and emotional bonds.

Nontraditional Families

Family structures that deviate from the traditional model of a nuclear family, including single-parent families, blended families, and same-sex parent families.

Macrosystem

A term used in Bronfenbrenner's ecological systems theory to describe the cultural or societal context that influences an individual's development, encompassing societal norms, laws, and culture.

Microsystem

The immediate environment in which an individual interacts, such as family, school, and workplace.