Use the Following to Answer Questions

question 150

Multiple Choice

Use the following to answer questions :
-(Scenario: Assets and Liabilities of the Banking System) Look at the scenario Assets and Liabilities of the Banking System. Suppose that the reserve ratio is 10% and the Fed buys $25,000 worth of U.S. Treasury bills from the banking system. If the banking system does NOT want to hold any excess reserves, _____ will be added to the money supply.

• A)about $667,000
• B)about $111,000
• C)$250,000
• D)$1 million

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Definitions:

Semantic Priming

A psychological effect in which the understanding or processing of a word is influenced by a prior exposure to a semantically related word or concept.

Episodic Memory

Memory for specific events and experiences.

Automatization

The process by which a skill becomes automatic with practice, requiring less conscious thought and effort to perform.

Spreading Activation

A mechanism within associative networks that explains how information is retrieved in the brain, where thinking about one concept activates related concepts.