If the Fed sells $10 million in bonds to a bank, and the required reserve ratio is 20 percent, then the banking system can:
a. decrease the money supply by up to $10 million.
b. decrease the money supply by up to $40 million.
c. decrease the money supply by up to $50 million.
d. decrease the money supply by up to $2 million.
e. increase the money supply by up to $50 million.
c
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Other things remaining the same, which of the following is likely to happen if all homemakers in an economy start working as paid labor?
A) There will be a fall in both the wage rate and the employment level. B) There will be an increase in both the wage rate and the employment level. C) There will be an increase in the wage rate in the country and a fall in the employment level. D) There will be a fall in the wage rate in the country and an increase in the employment level.
A tax that does not change consumers’ behavior creates no
A. economic burden. B. excess burden. C. tax revenue. D. tax incidence.