If the Reserve Ratio Is 15 Percent,and Banks Do Not

question 48

Multiple Choice

If the reserve ratio is 15 percent,and banks do not hold excess reserves,and people hold only deposits and no currency,then when the Fed sells $25.5 million worth of bonds to the public,bank reserves

• A)increase by $25.5 million and the money supply eventually increases by $382.5 million.
• B)increase by $25.5 million and the money supply eventually increases by $170 million.
• C)decrease by $25.5 million and the money supply eventually decreases by $382.5 million.
• D)decrease by $25.5 million and the money supply eventually decreases by $170 million.

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Definitions:

Dysfunctional

Characterized by abnormal or impaired functioning, often affecting systems, relationships, or individual behavior.

Definition Of Abnormality

A concept used to describe patterns of behavior, thought, or emotion that deviate significantly from cultural norms and cause distress or impairment.

Dysfunction

An impaired or abnormal functioning of a bodily system or organ.

Danger To Self

A situation where an individual poses a threat to their own health or life, often used in the context of psychiatric evaluation.