Suppose the Desired Reserve Ratio Is 0

question 39

Multiple Choice

Suppose the desired reserve ratio is 0.2, and the Bank of Canada buys $3,000 of Canadian government securities.What is the maximum amount by which the money supply can increase?  

• A) $200 
• B) $600 
• C) $3,000 
• D) $15,000

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Definitions:

Employment-At-Will Policy

A legal doctrine stating that an employer can terminate an employee at any time for any reason, except an illegal one, and vice versa.

Image Advertising

Advertising designed to create a positive image of a company or brand rather than promoting a specific product or service.

Image Advertising

A form of advertising designed to create a favorable mental picture of a product or company, rather than promote sales directly.

Employment-At-Will Policy

A doctrine in U.S. labor law that states an employer can terminate an employee at any time for any reason, except an illegal one, and without warning, as long as the reason is not illegal.