Assume There Is No Leakage from the Banking System and That

question 345

Multiple Choice

Assume there is no leakage from the banking system and that all commercial banks are loaned up. The required reserve ratio is 25%. If the Fed sells $5 million worth of government securities to the public, the change in the money supply will be

• A) $100 million.
• B) $25 million.
• C) -$5 million.
• D) -$20 million.

---

Definitions:

Carbon Fixation

The process by which inorganic carbon dioxide is converted into organic compounds by living organisms, prominently through photosynthesis.

Light-Dependent Reactions

The phase of photosynthesis where light energy is captured and converted into chemical energy in the form of ATP and NADPH.

Photosystem

Large protein complex in the thylakoid membrane; consists of pigments and other molecules that collectively convert light energy to chemical energy in photosynthesis.

Photosynthesis

The biological process used by plants and some other organisms to convert light energy into chemical energy stored in glucose or other organic compounds.