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:

Cosine

A mathematical function used in trigonometry to define the ratio of the adjacent side to the hypotenuse of a right-angled triangle.

Sine

A trigonometric function denoting the ratio of the length of the side opposite to a given angle to the length of the hypotenuse in a right-angled triangle.

Pulsating

A periodic variation in magnitude or intensity, often used to describe waveforms or signals.

Peak-to-peak

A measure of the amplitude of a waveform, indicated by the difference between its maximum and minimum values.