If the Reserve Ratio Is 10%, and Banks Do Not

question 223

Multiple Choice

If the reserve ratio is 10%, and banks do not hold excess reserves, when the Fed purchases $10 million of government bonds, bank reserves

• A) increase by $10 million and the money supply could eventually increase by $10 million.
• B) decrease by $10 million and the money supply could eventually decrease by $100 million.
• C) increase by $10 million and the money supply could eventually increase by $100 million.
• D) decrease by $10 million and the money supply could eventually decrease by $10 million

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Definitions:

Evoked Sets

A group of relevant brands or products that a consumer recalls from memory when considering a purchasing decision in a particular category.

Retrieval Set

Includes those brands or stores that the consumer can readily bring forth from memory.

External Locus of Control

A psychological concept describing individuals who believe that their successes or failures result from external factors and forces beyond their personal control.

Perceived Benefits Analysis

The evaluation of the advantages or improvements that individuals or organizations anticipate or experience from a product, service, or action.