The Commercial Banking System, Because of a Recent Change in the Required

question 83

Multiple Choice

The commercial banking system, because of a recent change in the required reserve ratio from 8 percent to 10 percent, finds that it is $50 million short of reserves.If it is unable to obtain anyadditional reserves, it mustreduce deposits andmoney supply by

• A)$250 million.
• B)$625 million.
• C)$500 million.
• D)$50 million.

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Definitions:

Glucagon

A hormone produced by the pancreas that raises blood glucose levels by promoting the breakdown of glycogen in the liver.

Biological Rhythms

Natural cycles of change in bodily functions or activities, including sleep-wake cycles and hormonal cycles, governed by internal biological clocks.

Melatonin

A hormone secreted by the pineal gland, involved in regulating sleep-wake cycles and circadian rhythms.

Calcitonin

A hormone produced by the thyroid gland that helps regulate calcium levels in the blood by reducing the calcium and phosphate levels in the blood.