In a Simplified Banking System Subject to a 25 Percent

question 91

Multiple Choice

In a simplified banking system subject to a 25 percent required reserve ratio, a $1,000 open-market purchase by the Fed would cause the money supply to:

• A) increase by $1,000.
• B) decrease by $1,000.
• C) decrease by $4,000.
• D) increase by $4,000.

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Definitions:

Amoxicillin

An antibiotic used to treat a variety of bacterial infections, part of the penicillin class of antibiotics.

Urinary Tract Infection

An infection that can affect any part of the urinary system, including the bladder, kidneys, and urethra, typically caused by bacteria.

Unit-Dose

A method of drug packaging and delivery where each dose of medication is individually packaged and labeled, ensuring accuracy and safety.