The Banking System Currently Has $50 Billion of Reserves,none of Which

question 111

Multiple Choice

The banking system currently has $50 billion of reserves,none of which are excess.People hold only deposits and no currency,and the reserve requirement is 10 percent.If the Fed raises the reserve requirement to 12.5 percent and at the same time sells $10 billion worth of bonds,then by how much does the money supply change?

• A)It falls by $20 billion.
• B)It falls by $110 billion.
• C)It falls by $180 billion.
• D)None of the above is correct.

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Definitions:

Health Care System

The totality of services offered by all health disciplines.

Manitoba Government

The provincial administration of Manitoba, Canada, responsible for local governance, legislation, and public services.

Nursing Diploma Program

An educational program that prepares students for nursing practice, typically focusing on practical skills and lasting about two to three years.

Nursing Shortage

A critical shortage of available nursing staff relative to the demand for nursing and healthcare services.