In a Fractional-Reserve Banking System with No Excess Reserves and No

question 124

Multiple Choice

In a fractional-reserve banking system with no excess reserves and no currency holdings,if the central bank buys $100 million worth of bonds,

• A)reserves and the money supply increase by less than $100 million.
• B)reserves increase by $100 million and the money supply increases by $100 million.
• C)reserves increase by $100 million and the money supply increases by more than $100 million.
• D)both reserves and the money supply increase by more than $100 million.

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Definitions:

Objective Criterion

A measurable factor that serves as a basis for decision-making or evaluation, not influenced by personal feelings, interpretations, or prejudice.

Disparate-Impact Cases

Legal cases that deal with practices that adversely affect one group of people more than another, even if the practices are formally neutral.

Unintentional Discrimination

A situation where policies, practices, or actions result in unequal outcomes for different groups without the intent to discriminate.

Same Sex Harassment

Harassment on the basis of sexual orientation or toward individuals of the same sex, which can include unwelcome sexual advances or conduct affecting job performance.