If the Reserve Requirement for Banks Is Fixed at 10

question 43

Multiple Choice

If the reserve requirement for banks is fixed at 10% and the Fed wishes to decrease the money supply by $500 billion,what type of open market operation should the Fed undertake?

• A) Sell $55.56 billion in government securities
• B) Purchase $55.56 billion in government securities
• C) Sell $50.00 billion in government securities
• D) Purchase $50.00 billion in government securities

---

Definitions:

Basic

Referring to the fundamental, essential, or primary part or level of something, often used to describe concepts or skills that serve as a foundation.

Longitudinal Research

A study design that involves repeated observations of the same variables or groups over a period of time, often years or decades, to track changes or developments.

Historical Influence

The impact that past events, cultures, and people have on present developments, behaviors, or thoughts.

Cultural Experiences

Interactions, practices, and activities that person has which are shaped by and contribute to the customs, beliefs, and values of a particular society.