Mr Garrison Has Recently Obtained a Bank Card from South

question 127

Multiple Choice

Mr. Garrison has recently obtained a bank card from South Park National Bank. Excited about the concept of using a little plastic card to get money from a machine, he quickly runs down to the nearest Automatic Teller Machine and withdraws $500. This action has

• A) increased the money supply by $500.
• B) reduced the money supply by $500.
• C) reduced the bank's required reserves by $25 assuming the reserve ratio is 5 percent.
• D) not changed the money supply.

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Definitions:

Ratio

A ratio indicating how often one number can encompass or be encompassed by another value.

Unknown Quantities

Refers to amounts or numbers that are not specifically known or determined.

Proportion

An installment, section, or count contemplated in proportion to its total mass.

Market Share

The portion of a market controlled by a particular company or product.