Refer to the given balance sheets and assume the reserve ratio is 25 percent. Suppose the Federal Reserve Banks sell $2 in securities directly to the commercial banks. As a result of this transaction, the supply of money:
A. will decrease by $2, but the money-creating potential of the commercial banking system
will not be affected.
B. is not directly affected, but the money-creating potential of the commercial banking system
will decrease by $8.
C. will directly increase by $2 and the money-creating potential of the commercial banking
system will decrease by an additional $8.
D. will directly increase by $2 and the money-creating potential of the commercial banking
system will increase by an additional $8.
B. is not directly affected, but the money-creating potential of the commercial banking system
will decrease by $8.
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Which of the following is a problem when comparing GDPs per capita between nations?
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The major similarity between monopolistic competition and perfect competition is
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