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.

---

Definitions:

Sales Team

A group within a company that is primarily focused on selling the organization's products or services to customers.

Bonus

An additional compensation or reward given to employees over their regular pay, often tied to performance or achievement.

Leadership

The act of guiding or directing a group towards achieving a common goal through influence and inspiration.

Development Priority

The importance assigned to different areas or aspects in the planning of growth or progress.