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:

Differentiated Products

Goods or services that are distinguished from similar products in the market by unique characteristics or features.

High Barriers

Obstacles that make it difficult to enter a particular market or industry, which can include things like high investment costs, stringent regulations, or established competition.

Few Firms

A market condition characterized by a small number of companies controlling the majority of market share, often leading to oligopoly dynamics.

Herfindahl-Hirschman Index

A measure of market concentration used to evaluate potential antitrust concerns, calculated by squaring the market share of each firm competing in the market and then summing the resulting numbers.