If the Fed Buys a $100,000 Government Security from a Bank

question 29

Multiple Choice

If the Fed buys a $100,000 government security from a bank when the desired reserve ratio is 10 percent and the currency drain ratio is 50 percent,the bank can loan a maximum of

• A)$50,000.
• B)$40,000.
• C)$100,000.
• D)$90,000.
• E)$60,000.

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Definitions:

Supply Of Resources

The availability or provision of natural, economic, or human elements necessary for production or survival.

Reproductive Time Lag

The delay between the onset of sexual maturity and the age at which an organism first reproduces, influenced by factors like genetics, nutrition, and environmental conditions.

Indefinitely Sustained

A condition or process capable of continuing or being maintained for an unlimited time without detriment or decline.

Biologists

Scientists who study living organisms and their relationship to the environment.