Assuming a Simple Money Multiplier, If the Fed Increases Bank

question 97

Multiple Choice

Assuming a simple money multiplier, if the Fed increases bank reserves by $100 and the required reserve ratio is 25 percent, then the maximum increase in deposits within the banking system as a whole is

• A)$4,000.
• B)$1,000.
• C)$400.
• D)$75.

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Definitions:

Triceps Brachii

A major muscle of the upper arm responsible for extension of the forearm at the elbow joint.

Forearm

The region of the arm between the elbow and the wrist, consisting of two bones (radius and ulna) and various muscles, nerves, and blood vessels.

Ulna

One of the two long bones in the forearm, extending from the elbow to the smallest finger, and playing a role in arm movement and stability.

Biceps Brachii

A muscle of the upper arm that acts to flex the elbow and rotate the forearm.