Suppose the Required Reserve Ratio Is 10

question 96

Multiple Choice

Suppose the required reserve ratio is 10%.Mr.Normal uses his ATM card to withdraw $1,000 from this checking account in California National Bank.This action has

• A)increased the M1 measure of money supply by $1,000.
• B)reduced the bank's required reserves by $1,000.
• C)increased the M2 measure of money supply by $1,000.
• D)not changed the MI or M2 measures of money supply.

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Definitions:

Confidence

A measure of the degree to which one is certain about a particular prediction or outcome.

Predetermined Time

A technique in time and motion study where standard times are assigned to basic motions and tasks, used for setting standard times for work activities.

Standard Deviation

A numerical indicator that calculates the spread or variability among a collection of data points.

Standard Time

The time set for the completion of a task, often used as a benchmark in manufacturing and other operations to measure efficiency.