QUESTION 1 1 points Save Answer Which of the following terms is used to describe

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QUESTION 1 1 points Save Answer Which of the following terms is used to describe the proportion of deposits that banks are legally required to deposit with the central bank? o A. discount requirements reserve requirements ° C. deposit requirements O D-monetary requirements QUESTION 2 1 points Save Answer If the Fed purchases S1000 in government bonds on the open market, and the Required Reserve Ratio is 20%, how much money will be created by this open market operation 0 A. $5000 OB.$1000 C. $9000 D. $4000 Click Save and Submit to save and submit. Click Save A Answers to save all answers Save All Answers Save and Suubmit

Explanation / Answer

Ans:

1) Option B

Reserve requirement

Reserve requirement is the  minimum amount of reserves that must be held by a commercial bank as per central bank regulation.

2) Option A - $5000

money supply = $1000 / 0.20

= $5000

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