Assume the Reserve Requirement Is 25% and the Federal Open

question 46

Multiple Choice

Assume the reserve requirement is 25% and the Federal Open Market Committee buys $4 million of U.S. government bonds from the public. As a result of this transaction, the supply of money is

• A) not directly affected but has the potential to be increased by a total of $12 million.
• B) directly increased by $4 million and has the potential to be increased by another $12 million.
• C) directly reduced by $4 million and has the potential to be reduced by another $12 million.
• D) directly increased by $4 million and has the potential to be increased by another $8 million.

---

Definitions:

<90/60

Indicates blood pressure readings lower than 90 millimeters of mercury systolic and 60 millimeters of mercury diastolic, which is considered hypotension.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a specified time period.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price in a specified period.

Increase in Demand

A situation where there is a rise in the quantity of a product or service that consumers are willing and able to buy at given prices.