The Reserve Ratio Is 10 Percent

question 156

Multiple Choice

The reserve ratio is 10 percent. Depositors regularly keep 10 percent of their deposits as cash. If the Fed buys $1 million of U.S. government securities, excess reserves

• A) increase by $800,000.
• B) increase by $810,000.
• C) increase by $900,000.
• D) increase by $1 million.

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Definitions:

Sarcolemma

The muscle cell plasma membrane.

Kohlberg's Theory

A theory of moral development proposed by Lawrence Kohlberg, suggesting that moral reasoning develops in six stages throughout a person's life.

Moral Development

The process through which individuals acquire the standards of right and wrong that guide their behavior within society.

Morally

Relating to principles of right and wrong behavior; ethical considerations in actions and decision-making.