In a Simplified Banking System with a 20 Percent Required

question 23

Multiple Choice

In a simplified banking system with a 20 percent required reserve ratio, a $1,000 open-market sale by the Fed would cause the money supply to:

• A) increase by $200.
• B) decrease by $200.
• C) decrease by $5,000.
• D) increase by $5,000.

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Definitions:

Mirror Neurons

Neurons that fire whenever an animal performs an action, such as stretching out its arm or reaching toward a target, and also whenever the animal watches another performing the same action.

Tongue Movements

The motion and actions of the tongue, which are essential for various functions such as speaking, eating, and swallowing.

Frightening Facial Expression

A facial expression typically identified by widened eyes, raised eyebrows, and other facial movements that convey fear or horror.

Mirror Neurons

Specialized neurons that fire both when an individual acts and when the individual observes the same action performed by another. This mirroring process is thought to be essential for understanding others' actions and intentions.