The Fed Changes Reserve Requirements from 10 Percent to 7

question 41

Multiple Choice

The Fed changes reserve requirements from 10 percent to 7 percent,thereby creating $900 million in excess reserves. The total change in deposits (with no drains) would be

• A)$3,000 million.
• B)$15,625 million.
• C)$12,857 million.
• D)$3,795 million.
• E)none of the options.

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Definitions:

Kantianism

Kantianism is a philosophical doctrine based on the works of Immanuel Kant, emphasizing the principles of universal morality, duty, and the importance of intention behind actions.

Rights Theory

A framework in ethics and philosophy that holds certain rights as fundamentally important to human beings, which must be respected and protected.

Deontological Theory

An ethical framework that judges the morality of an action based on the action's adherence to rules or duties, rather than the consequences of the action.

Utilitarian Theory

A theory in ethics and philosophy that actions are right if they are useful or for the benefit of a majority.