If There Are Zero Excess Reserves in the Canadian Banking

question 96

Multiple Choice

If there are zero excess reserves in the Canadian banking system and the Bank of Canada raises the required reserve ratio from 10 percent to 20 percent,then

• A)the money supply will double.
• B)the money supply will be unaffected.
• C)required reserves double and the money supply must decrease by this amount times 5.
• D)required reserves double and the money supply must decrease by this amount times 10.

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Definitions:

Property Qualifications

Requirements that individuals must own a certain amount of property or wealth to be eligible for specific rights or positions, such as voting or holding public office.

Lower Orders

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Colonies-Turned-States

Refers to former colonies that transitioned into becoming states, particularly in contexts like the United States where British colonies gained independence and statehood.