If the Required Reserve Ratio in the Banking System Is

question 67

Multiple Choice

If the required reserve ratio in the banking system is 10% and the Fed sells $1,000 in U.S. bonds, what will happen to supply?

• A) It will increase by as much as $5,000.
• B) It will decrease by as much as $5,000.
• C) It will increase by as much as $10,000.
• D) It will decrease by as much as $10,000.
• E) It will remain unchanged.

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Definitions:

Deindividuation

Deindividuation is a psychological state where an individual loses self-awareness and a sense of individuality, often resulting in uninhibited and impulsive behavior, usually in group settings.

Social Facilitation

The enhancement of performance when in the presence of others, as opposed to being alone.

Arousal

A state of awareness and responsiveness to environmental stimuli, both physically and mentally.

Anonymity

The condition of being anonymous, where an individual's identity is not known or is deliberately withheld.