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:

Specialized Stems

Stems that perform functions other than support and conduction, including storage, reproduction, and photosynthesis, such as rhizomes, tubers, and cacti.

Tendrils

Thin, spirally coiling structures that extend from the stems or leaves of climbing plants and serve as means for grasping and support.

Sweet Peas

Fragrant flowering plants known scientifically as Lathyrus odoratus, popular in gardens for their colorful and aromatic flowers.

Leaf Abscission

The process by which plants naturally shed their leaves as a part of seasonal changes, growth regulation, or in response to stress conditions.