If the Reserve Ratio Is 8 Percent,then a Decrease in Reserves

question 71

Multiple Choice

If the reserve ratio is 8 percent,then a decrease in reserves of $6,000 can cause the money supply to fall by as much as

• A)$48,000.
• B)$75,000.
• C)$55,200.
• D)$10,800.

---

Definitions:

Competition

The rivalry among businesses to attract customers, improve offerings, and achieve market dominance.

Unfriendly Mergers

Mergers or acquisitions that occur without the consent of the target company's management or board, often involving hostile takeover tactics.

Net Cash Flows

The difference between a company's total cash inflows and outflows over a specific period, indicating its overall liquidity movement.

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.