In a Simplified Banking System Subject to a 25 Percent

question 91

Multiple Choice

In a simplified banking system subject to a 25 percent required reserve ratio, a $1,000 open-market purchase by the Fed would cause the money supply to:

• A) increase by $1,000.
• B) decrease by $1,000.
• C) decrease by $4,000.
• D) increase by $4,000.

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Definitions:

Maintenance

The process of keeping something in good condition by checking or repairing it regularly.

Salutary Goals

are objectives or outcomes that contribute positively to an individual’s well-being or health.

Health Promoting

Actions or behaviors that contribute to the maintenance or improvement of health and well-being.

Correct Deficiencies

The process of identifying and rectifying lacks or shortcomings in a system, individual skills, or organizational processes.