Suppose the Desired Reserve Ratio Is 20 Percent and There

question 57

Multiple Choice

Suppose the desired reserve ratio is 20 percent and there is no currency drain.Then a $1 increase in the monetary base leads to the banking system to increase the quantity of money by

• A)$0.02.
• B)$4.
• C)$5.
• D)$20.
• E)$2.

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Definitions:

Jeannette Rankin

The first woman ever elected to the United States Congress, serving as a Representative from Montana and a lifelong advocate for peace and women's rights.

Woman

An adult female human being.

Congress

is the legislative branch of the United States federal government, composed of two houses: the Senate and the House of Representatives.

Peace Ship

Henry Ford's 1915 initiative to send a ship to Europe carrying American activists in an effort to negotiate an end to World War I; it was met with skepticism and did not achieve its goal.