Suppose You Found $2,000 Hidden in Your Mattress and Deposited

question 28

Multiple Choice

Suppose you found $2,000 hidden in your mattress and deposited it in a demand deposit account at your bank. If the reserve requirement was 25 percent, the deposit would directly create ____ in excess reserves and ultimately lead to a ____ total increase in the money supply, if all banks in the system lend out 100 percent of their excess reserves.

• A)​$2,000; $8,000
• B)​$2,000; $6,000
• C)​$1,500; $8,000
• D)​$1,500; $6,000

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Definitions:

Assert Propositions

The act of confidently stating or affirming a propositional statement as true or valid in a discourse or argument.

Sentence

A set of words that is complete in itself, expressing a statement, question, exclamation, or command, and consisting of a main clause and sometimes one or more subordinate clauses.

Proposition Not-p

A logical representation denoting the negation of a proposition p, effectively stating that p is not true.

Whales

Large aquatic mammals belonging to the order Cetacea, which includes various species such as the blue whale and the humpback whale.