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:

Hearing

The sense through which sound is perceived, involving the detection of vibrations through the ear.

Taste

One of the five senses, it is the perception of flavor perceived in the mouth and throat on contact with a substance.

Olfaction

The sense of smell, an important sensory system allowing for the detection and identification of odors in the environment.

Audition

The sense of hearing; the perception of sound.