Use the Following to Answer Questions

question 52

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 Federal Reserve sells $25,000 worth of U.S. Treasury bills to the banking system. If the banking system does NOT want to hold any excess reserves, _____ will be _____ the money supply.

• A)$110,000; added to
• B)$110,000; subtracted from
• C)$250,000; subtracted from
• D)$250,000; added to

---

Definitions:

Pessimistic Explanatory Style

A tendency to explain negative events as having personal, permanent, and pervasive causes.

Type B Personality

A personality type characterized by a less competitive, more relaxed, and less stress-prone behavior pattern compared to Type A personality.

Power Motive

The inherent drive to influence or control others and to achieve a position of authority.

Impulsivity

A trait characterized by acting on a whim, displaying behavior characterized by little or no forethought, reflection, or consideration of the consequences.