Suppose That the Fed Undertakes an Open Market Purchase of $1

question 153

Multiple Choice

Suppose that the Fed undertakes an open market purchase of $1 million worth of securities from a bank.If the required reserve ratio is 9%,what is the resulting change in checkable deposits (or the money supply) ,assuming that there are no cash leakages and that banks hold zero excess reserves?

• A)$11.11 million
• B)$9 million
• C)$1.09 million
• D)$90 million

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Definitions:

Sales Performance

The measurement and evaluation of the sales activities and outcomes against the set goals or benchmarks.

Sales Quota

The minimum desired sales level for an individual or team for a specified period of time.

Specified Period

A specified period refers to a distinct, predefined duration of time during which certain activities are carried out or certain conditions apply, often detailed in contracts, plans, and schedules.

Incremental Productivity Method

A cost-based sales force sizing approach that compares the cost of adding one salesperson to expected additional sales revenue; the company will keep adding salespeople as long as the revenue exceeds the added cost.