Suppose the Desired Reserve Ratio Is 10 Percent and You

question 86

Multiple Choice

Suppose the desired reserve ratio is 10 percent and you pay back a loan of $40 000.What is the impact of this on the bank's reserves and,once the banking system has completed its adjustments to the repayment,the money supply?

• A)You add $40 000 in reserves, which adds $400 000 to the money supply.
• B)You eliminate $40 000 in reserves, which eliminates $400 000 from the money supply.
• C)You eliminate $4000 in reserves, which eliminates $40 000 from the money supply.
• D)You add $4000 in reserves, which adds $40 000 to the money supply.

---

Definitions:

Isotonic Exercise

Exercise that requires the contraction of muscles and the movement of joints, as in weight lifting.

Muscle Endurance

The ability of a muscle or muscle group to repeatedly exert force against resistance over an extended period.

Cardiovascular Fitness

The ability of the heart, blood cells, and lungs to supply oxygen-rich blood to working muscle tissues and the ability of those tissues to use oxygen to produce energy for movement.

Dynamic Fitness

Refers to the ability of an individual to perform movements with strength and energy in a range of motions, contributing to overall physical health.