Multiple Choice
Suppose a student deposits into a downtown bank a $200 cheque that she received from her parents in the suburbs. This transaction alone would
A) decrease the money supply.
B) decrease the money supply by $1000 if the target reserve ratio was 20 percent.
C) increase the money supply by an indeterminate amount.
D) not change the money supply.
E) increase the money supply by $1000 if the target reserve ratio was 20 percent.
Correct Answer:
Verified
Correct Answer:
Verified
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