The Fed Buys $25,000 of Government Securities

question 92

Multiple Choice

The Fed buys $25,000 of government securities.The desired reserve ratio is 20 percent and the currency drain is zero.What will be the change in the quantity of money?

• A) $5,000
• B) $20,000
• C) $25,000
• D) $125,000
• E) $50,000

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Definitions:

Theoretical Rationality

A concept in philosophy and rationality studies that concerns the systematic and principled organization of knowledge and actions according to logical, methodical, and coherent principles.

Practical Rationality

The use of reason to address practical matters, focusing on achieving specific goals or meeting certain needs rather than on abstract principles.

Theoretical Rationality

Refers to the logical structuring of thoughts and actions based on theoretical knowledge and principles.

Metaphysical Logic

Philosophical reasoning that focuses on the nature of being, reality, and the universe beyond the physical or empirical.