If the Reserve Requirement Is 10%, Then a $6,000 Decrease

question 171

Multiple Choice

If the reserve requirement is 10%, then a $6,000 decrease in deposits means that the money supply

• A) will decrease by $600.
• B) has the potential to decrease by $600.
• C) will decrease by $60,000.
• D) has the potential to decrease by $60,000.

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Definitions:

Alternatives Not Chosen

Options that are forsaken when a decision is made in favor of another option.

Mutually Beneficial Exchanges

Transactions that provide advantages or gains to all parties involved.