Use the Following to Answer Questions

question 252

Multiple Choice

Use the following to answer questions:
-(Table: Assets and Liabilities of the Banking System) Refer to Table: Assets and Liabilities of the Banking System.Suppose that the reserve ratio is 10% and the Bank of Canada sells $66 700 worth of Canadian Treasury bills to the banking system.If the banking system does NOT have any excess reserves,_____ will be _____ the money supply.

• A) $667 000;subtracted from
• B) $667 000;added to
• C) $250 000;subtracted from
• D) $250 000;added to

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Definitions:

Marginal Costs

The additional cost incurred by producing one more unit of a good or service, crucial for making production and pricing decisions.

Marginal Benefits

The incremental satisfaction or benefit a consumer derives from consuming an additional unit of a good or service.

Net Benefits

The total benefits of a decision or project after subtracting all the costs associated with it.

Total Cost

The complete cost of producing a good or service, combining both fixed and variable expenses.