Use the Following to Answer Questions

question 195

Multiple Choice

Use the following to answer questions :
Scenario: Money Supply Changes II
Charlotte withdraws $8,000 from her checkable bank deposit to pay tuition this semester. Assume that the reserve requirement is 20% and that banks do not hold excess reserves.
-(Scenario: Money Supply Changes II) Look at the scenario Money Supply Changes II. By how much will the money supply contract as a result of the withdrawal?

• A)$40,000
• B)$0
• C)$8,000
• D)$32,000

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Definitions:

Explanatory Variables

Variables in a statistical model that are used to explain variation in the response variable, also known as independent variables.

Indicator Variable

A variable used in statistical models that takes the value 1 if a specific condition is true and 0 if it is false, often used to represent categorical data in numerical form.

Logistic Regression

A statistical method for analyzing datasets in which there are one or more independent variables that determine an outcome, which is dichotomous.

Multiple Logistic Regression

A statistical technique that models the probability of a certain outcome or event based on more than one independent variable.