If the Federal Reserve Sells $1,000 in Bonds And,as a Result,the

question 126

Multiple Choice

If the Federal Reserve sells $1,000 in bonds and,as a result,the money supply decreases by $2,500,what is the required reserve ratio?

• A) 0.4
• B) 2.5
• C) 0.5
• D) 0.1
• E) 0.2

---

Definitions:

Months

Units of time based on the Earth's orbit around the Sun, typically used to measure periods within a year and consisting of 28 to 31 days.

Paid Maternity Leave

A company or government policy that allows women employees to take time off work with pay following the birth of their child.

Breast-feed

The act of feeding a baby with milk directly from a mother's breast, considered beneficial for the baby's health and development.

Formula Substitute

An alternative to breast milk, usually based on cow's milk or soy protein, intended to provide infants with essential nutrients.