The Banking System Currently Has $200 Billion of Reserves,none of Which

question 103

Multiple Choice

The banking system currently has $200 billion of reserves,none of which are excess.People hold only deposits and no currency,and the reserve requirement is 4 percent.If the Fed raises the reserve requirement to 10 percent and at the same time buys $50 billion worth of bonds,then by how much does the money supply change?

• A)It rises by $600 billion.
• B)It rises by $125 billion.
• C)It falls by $2,500 billion.
• D)None of the above is correct.

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Definitions:

Work Cell

A layout design in manufacturing that arranges machinery and staff in a sequence that supports a smooth flow of materials and components through the production process.

Cycle Time

The total time from the beginning to the end of a process, indicating the speed of production and process efficiency.

Workstation

A specific area or desk equipped with the necessary tools and equipment for an individual to complete their job tasks.

Retail Layout

The strategic arrangement of physical space in retail stores to optimize customer experience and sales.