If the Fed Buys a $100,000 Government Security from a Bank

question 120

Multiple Choice

If the Fed buys a $100,000 government security from a bank when the desired reserve ratio is 10 percent and the currency drain ratio is 50 percent, the bank can loan a maximum of

• A)$100,000.
• B)$60,000.
• C)$40,000.
• D)$90,000.
• E)$50,000.

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Definitions:

College Culture

The unique set of behaviors, traditions, beliefs, and values shared among members of a college community.

Ordinary Social Interactions

Everyday exchanges or dealings between individuals in typical social settings.

Behavior

The actions or reactions of an organism, often in response to its environment.

Dysfunctional

Characterized by abnormal or impaired functioning, often affecting systems, relationships, or individual behavior.