If the Reserve Requirement Is 10%, Then a $6,000 Decrease

question 171

Multiple Choice

If the reserve requirement is 10%, then a $6,000 decrease in deposits means that the money supply

• A) will decrease by $600.
• B) has the potential to decrease by $600.
• C) will decrease by $60,000.
• D) has the potential to decrease by $60,000.

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Definitions:

Informative

Providing useful or significant information or data about a subject or topic.

One-Point Rule

A mathematical principle used in decision making that states if a certain condition is met or not met, a specific action should be taken or avoided.

Runs Rule

A non-parametric statistical test that checks for randomness in a data sequence.

Out-Of-Control Signal

An indication, often from a control chart, that the process variability is exceeding the predetermined control limits.