In the Simple Deposit Expansion Model,a Decline in Checkable Deposits

question 79

Multiple Choice

In the simple deposit expansion model,a decline in checkable deposits of $1,000 when the required reserve ratio is equal to 10 percent implies that the Fed

• A)sold $1,000 in government bonds.
• B)sold $100 in government bonds.
• C)purchased $1,000 in government bonds.
• D)purchased $100 in government bonds.

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Definitions:

American Economy

The economic system of the United States, characterized by a mixture of private and public enterprises.

Commercial Manufacturing

Commercial manufacturing refers to the large-scale production of goods typically utilizing machinery in factories, aimed at supplying a wide market.

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Markets that have grown in size or scope, allowing for increased business opportunities and consumer choices.

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The fundamental principles or established precedents according to which a state or other organization is governed.