Suppose That the Required Reserve Ratio Is 0

question 176

Multiple Choice

Suppose that the required reserve ratio is 0.4. If a customer withdraws $10 million from a bank, then the money supply could potentially:

• A) decrease by $40 million.
• B) decrease by $25 million.
• C) increase by $2.5 million.
• D) increase by $40 million.

---

Definitions:

Time-Series Graph

A time-series graph displays data points at successive time intervals, showing trends, cycles, or patterns over time.

Omitted Variables

Variables that are not included in a model, which can lead to biased estimates and incorrect conclusions.

Reverse Causality

A situation in research or analysis where it is unclear whether a supposedly causal factor is actually causing the outcome, or if the situation is happening because of the outcome itself; a reversal of the direction of causation.

Features of Construction

Characteristics or attributes that define the nature of construction projects, including complexity, permanence, and the need for collaboration among different specialties.