If Banks Face a Reserve Requirement of 10%,then When the Fed

question 313

Multiple Choice

If banks face a reserve requirement of 10%,then when the Fed increases bank reserves by $20 million,the money supply can be estimated to increase by about

• A)$2 million.
• B)$20 million.
• C)$200 million.
• D)None of the choices are correct.

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Definitions:

Irrationality

The quality of being illogical or unreasonable in thoughts or actions.

Moodiness

A state characterized by frequent changes in mood or temper, often without external causes.

Environmental-mold Traits

Traits believed to be shaped primarily by one's environment and experiences rather than by innate biological factors.

Social Environments

The immediate physical and social setting in which people live or in which something happens or develops, including the culture that the individual was educated or lives in.