Assume That There Is a 25 Percent Reserve Ratio and That

question 70

Multiple Choice

Assume that there is a 25 percent reserve ratio and that the Federal Reserve buys $4 billion worth of government securities.If the securities are purchased from the nonbank public, this action has the potential to increase money supply by a maximum of

• A)$16 billion, but only by $14 billion if the securities are purchased directly from commercial banks.
• B)$14 billion, but by $16 billion if the securities are purchased directly from commercial banks.
• C)$16 billion, and also by $16 billion if the securities are purchased directly from commercial banks.
• D)$14 billion, and by $20 billion if the securities are purchased directly from commercial banks.

---

Definitions:

Cyberattacks

Malicious attempts to disrupt, damage, or gain unauthorized access to computer systems, networks, or personal devices.

Social Media Management

The process of managing online interactions and content across social media platforms like Facebook, Instagram, and Twitter.

Photoshop

A popular digital imaging software used for photo editing, graphic design, and digital art creation by Adobe Systems.

Travel Website

A website dedicated to providing information, resources, and booking options for travelers.