Suppose That the Fed Undertakes an Open Market Purchase of $5

question 97

Multiple Choice

Suppose that the Fed undertakes an open market purchase of $5 million worth of securities from a bank.If the required reserve ratio is 12%,what is the resulting change in checkable deposits (or the money supply) ,assuming that there are no cash leakages and that banks hold zero excess reserves?

• A)$4.17 million
• B)$7.95 million
• C)$5.68 million
• D)$41.67 million

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Autonomy

The capacity to make an informed, uncoerced decision independently.

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A reduced ability to make informed, thoughtful decisions, often due to factors like cognitive impairment or lack of information.

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The principle of doing good and ensuring the well-being of others, especially in ethical frameworks and medical practices.

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Refers to the probability and magnitude of harm or discomfort anticipated in research not being greater than those ordinarily encountered in daily life or during routine physical or psychological examinations.