When a Banker Accepts a Deposit of $1,000 in Cash

question 55

Multiple Choice

When a banker accepts a deposit of $1,000 in cash and puts $200 aside as required reserves and then makes a loan of $800 to a new borrower, this set of transactions

• A) decreases the money supply by $1,000.
• B) decreases the money supply by $200.
• C) does not change the money supply.
• D) increases the money supply by $200.
• E) increases the money supply by $800.

---

Definitions:

National Defense

The policies and actions taken by a country to protect itself against external threats.

Iron Triangle

A term that describes the policy-making relationship among the congressional committees, the bureaucracy, and interest groups.

Congressional Committees

are sub-organizations within the United States Congress that handle specific duties, such as developing legislation and conducting oversight.

Administrative Agencies

Government bodies responsible for the oversight and implementation of specific regulations and laws in various sectors.