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If the Required Reserve Ratio Is 0

question 134

Multiple Choice

If the required reserve ratio is 0.2,and the Fed buys $3,000 of U.S.government securities,the maximum amount by which the money supply can increase is:


Definitions:

Free Trade

Worldwide trading conducted without interference through tariffs, quotas, or restrictions, following its inherent course.

Accounting Profits

The net income of a company calculated by subtracting total expenses from total revenues, following accounting rules.

Natural Monopoly

A market condition where due to high fixed costs or unique resources, a single firm can supply a product or service at a lower cost than any potential competitor, thus dominating the market.

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