Assume That the Federal Reserve Injects $3

question 73

Multiple Choice

Assume that the Federal Reserve injects $3.2 billion into the financial system. If the reserve requirement is 13%, what is the maximum increase in money supply (in billions) ?

• A)$24.00
• B)$24.30
• C)$24.88
• D)$24.10
• E)$24.62

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Definitions:

Direct Approach

A method of financial reporting or problem solving that involves straightforward, clear communication without indirectness.

Investing Activities

Transactions involving the purchase and sale of long-term assets and investments not included in cash equivalents.

Financing Activities

Activities that result in changes in the size and composition of the equity capital and borrowings of a company.