Answer the Question on the Basis of the Following Consolidated

question 168

Multiple Choice

Answer the question on the basis of the following consolidated balance sheet of the commercial banking system.Assume that the reserve requirement is 20 percent.All figures are in billions and each question should be answered independently of changes specified in all preceding ones. $\begin{array}{c}\begin{array}{lll}\quad\quad\quad\underline{\text { Assets}}\\\text { Reserves}\\\text { Securities}\\\text { Loans}\\\text { Property} \end{array}\begin{array}{l}\\\$ 200 \\300 \\500 \\400 \end{array}\begin{array}{lll}\quad\quad \underline{\text { Liabilities \& Net Worth }}\\\text { Checkable Deposits}\\\text { Stock Shares}\\\\\\\end{array}\begin{array}{lll}\\\$1,100\\400\\\\\\\end{array}\end{array}$


Refer to the given data.Suppose the Fed wants to increase the money supply by $1,000 billion to drive down interest rates and stimulate the economy.To accomplish this,it could lower the reserve requirement from 20 percent to:

• A) 10 percent.
• B) 12 percent.
• C) 14 percent.
• D) 15 percent.

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