If the Fed Sells $10 Million in Bonds to a Bank

question 20

Multiple Choice

If the Fed sells $10 million in bonds to a bank, and the required reserve ratio is 20 percent, then the banking system can:

• A) decrease the money supply by up to $10 million.
• B) decrease the money supply by up to $40 million.
• C) decrease the money supply by up to $50 million.
• D) increase the money supply by up to $2 million.

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Definitions:

Clear Filter

The action of removing applied criteria from a dataset to return to an unfiltered or original view.

Toggle Filter

A feature in software applications that allows users to switch filtering on and off on data sets to view specific subsets of data.

Toggle Filter

A feature in software that allows users to switch a filter on or off to change which data is displayed.

Filter By Form

A feature in database applications that allows users to filter data by filling out a form with criteria.