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Suppose an Economy Uses a Monetary System of Checkable Deposits

question 100

Multiple Choice

Suppose an economy uses a monetary system of checkable deposits only and it has a required reserve ratio of 20%. If the central bank in this economy conducts an open market purchase of $5 million of Treasury bills, this will potentially _____ the money supply by _____.


Definitions:

Less

Used to indicate a smaller amount or degree of something compared to another amount or thing.

"As Built"

A term used in construction and engineering to describe the final specifications of a project after completion, detailing how it was actually built.

Boundary Lines

The defined borders that mark the edges of a property or jurisdiction.

Physical Improvements

Refers to enhancements or modifications made to a property or asset that increase its value or utility.

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