Assume that the required reserve ratio is 25%. If the Fed buys $5 million worth of      government bonds from the public, the maximum change in the money supply is:   a) -$20 million. (b) -$12.5 million.   (c) $12.5 million.  (d) $20 million.

Aa31  Economics  During the 2008/09 recession, the Fed bailed out 25 percent of banks to keep them solvent. t/f

1. Financial institutions in the U.S. economy Suppose Clinton decides to use $1,000 currently held as savings to make a financial investment. One method of making a financial investment is the purchase of stock or bonds from a private company. 1. Suppose Warm Breeze, a cloud computing firm, is selling bonds to raise money for a new lab. This practice is called     finance. Buying a bond issued by Warm Breeze would give Clinton (an IOU, or promise to pay/ a claim to partial ownership in) the firm. In the event that Warm Breeze runs into financial difficulty, (the stockholders/ Clinton and the other bondholders) will be paid first. 2.   Which of the following statements are correct? Check all that apply. - The price of his shares will rise if Warm Breeze issues additional shares of stock. - The Dow Jones Industrial Average is an example of a stock exchange where he can purchase Warm Breeze stock. - Expectations of a recession that will reduce economywide corporate profits will likely…

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