Use the Following to Answer Questions

question 134

Multiple Choice

Use the following to answer questions:
The reserve requirement is 10% and Jack withdraws $5000 travel money from his chequable deposit.Assume that banks do not hold any excess reserves and that the public holds no currency,only chequable bank deposits.
-(Scenario: Money Supply Changes) Refer to Scenario: Money Supply Changes.After the withdrawal reserves _____,and chequable deposits _____ by $5000.

• A) decrease by $5000;decrease
• B) decrease by $5000;increase
• C) increase by $5000;decrease
• D) increase by $500;increase

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Definitions:

Closure

The psychological term for the process of seeking a sense of resolution or conclusion to a complex issue or an emotional matter.

Autokinetics

refers to an optical illusion where a stationary point of light appears to move in a dark room due to small involuntary eye movements.

Precognition

The claimed ability or phenomenon of knowing or perceiving future events before they happen.

Telepathy

The supposed communication of thoughts or ideas by means other than the known senses.