Download Monetary Policy and Open

DifferentTypesof InterestRatesand TheirBehavior
The federal funds rate is the short-term interest rate banks charge
other banks on overnight loans; this rate can be adjusted up or
down by actions taken by the Federal Reserve (the "Fed") to grow
or slow down the economy and inflation. To increase the money
supply and grow the economy, the government buys bonds from
banks to increase the amount banks can loan. Bonds (securities)
are loans that people give out with their money to a ,company or
government and they promise to pay you back in full, with regular
interest payments. When the Fed buys or sell bonds it is called
monetary policy, and it is critical in making an economy stable.
When the Fed sets higher interest rates, the banks pass along the
higher rates to borrowers, and vice versa when rates go down.
Page1
The FederalFundsRate
When inflation is high, the federal funds rate is low to grow the
economy. When inflation is low, the federal funds rate
increases to slow down the economy by slowing spending.
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The FederalFundsRate-Questions
48. Which of the following accurately de cribe the
federal fund rate?
A The intere t rate that bank charge tate
government
(B The intere t rate that bank charge other
bank for overnight loan
C The int ere t rate that bank pay on long-term
1
.
av1no
(D The intere t rate on per onal loan
E The intere t rate on government bond
Page3
The FederalFundsRate-Questions
48. Which of the following accurately de cribe the
federal fund rate?
A The intere t rate that bank charge tate
government
(9 The intere t rate that bank charge other
bank for overnight loan
C The int ere t rate that bank pay on long-term
1
.
av1no
(D The intere t rate on per onal loan
E The intere t rate on government bond
Page4
Demand-SidePolicies:MonetaryPolicies
Macroeconomic policy can have substantial effects on
economic fluctuations. Governments implement policies to
either help to resist recessions or minimize the impact of them.
Monetary policymakers typically prefer to implement policies
that minimize fluctuations in GDP, thus lessening the chance
of a recession occurring. Policies used to influence economic
fluctuations are sometimes called demand-side policies
because they aim to influence aggregate demand (GDP) in the
economy by decreasing fluctuations.
Page5
Demand-SidePolicies:MonetaryPolicies(cont.)
Keeping inflation low and stable is another part of government
policy to stimulate long-term economic growth. The
government ( G) has an important role in determining the
inflation rate, especially over the long-run (LR), because the
inflation rate in the long term depends on the growth rate of the
money supply (the total amount of currency (coin and paper
money) and deposits in banks in a country, which can be
impacted by the government.
Page6
Demand-SidePolicies:MonetaryPolicies(cont.)
An increase in the money supply increases real GDP, and the
goal is to increase it equal to the rate of imports. To increase
the money supply, like during a recession, the government
buys bonds (loans that people give out with their money to a
company or government and they promise to pay you back in
full, with regular interest payments) on the open market. A
regular increase in the money supply leads to an increase in the
price level, but only a possible slight increase in real GDP
while a continuous expansion of the money supply causes
hyperinflation.
Page7
Demand-SidePolicies:MonetaryPolicies(cont.)
A decrease in the money supply decreases AD and the price
level but doesn't change output in the short-run. Government
policy concerning the money supply and the control of
inflation is called monetary policy . The institution of
government assigned to conduct monetary policy in the U.S. is
called the Federal Reserve System, or the "Fed." When the
Fed tries to increase the money supply and boost the economy
by keeping interest rates low, it is called expansionary
monetary policy . Expansionary monetary policy increases the
price level and real GDP (Y).
Page8
Demand-SidePolicies:MonetaryPolicies(cont.)
To keep inflation low and stable, the Fed will implement
policies that impact consumer demand (D), depending on the
inflation rate. The primary tool that the Fed uses to influence
demand is interest rates. If there are signs that inflation is on
the rise because aggregate demand (AD) is growing faster than
potential output, the Fed may step in and sell bonds to banks in
order to raise interest rates, which will then slow the spending
of firms and the buying of consumers. This is because as the
Fed buys bonds, the amount available for banks to loan
decreases, increasing the interest rate. The Fed is also
concerned with minimizing the adverse impact of recessions.
Lowering interest rates can assist an economy in recovering
sooner from a recession, such as during the recession of
2000-2001 and the Great Recession of 2008-2010. Lowering
interest rates brings down the cost of purchasing goods.
Page9
Demand-SidePolicies:MonetaryPolicies-Questions
14. Which of the following i a monetary policy that
can be u ed to counteract a rece ion?
(A)
(B
(C
(D)
(E)
Page10
Buying bond in the open market
Increa ing the di count rate
Increasing the required re erve ratio
Lowering tax rate
Increasing government pending
Demand-SidePolicies:MonetaryPolicies-Questions
14. Which of the following i a monetary policy that
can be u ed to counteract a rece ion?
(e ) Buying bond in the open market
(B
(C
(D)
(E)
Page11
Increa ing the di count rate
Increasing the required re erve ratio
Lowering tax rate
Increasing government pending
Demand-SidePolicies:MonetaryPolicies-Questions
23. In the short run an expan ionary monetary policy
would most likely re ult in which of the following
change in the price level and real gro dome tic
product (GDP ?
(A
(B)
(C)
(D)
(E)
Price Level
Real GDP
Decrease
No change
lncrea e
Increa e
Increa e
Increase
Decrea e
No change
Decrea e
Increa e
59. Advocates of a monetary rule recommend
increa ing the money upply at a rate that i equal
to the rate of increa e in which of the following?
(A)
(B)
(C
(D
(E)
Page12
Price level
Unemployment rate
Levelofexport
Level of imports
Long-run real gro domestic product
Demand-SidePolicies:MonetaryPolicies-Questions
23. In the short run an expan ionary monetary policy
would most likely re ult in which of the following
change in the price level and real gro dome tic
product (GDP ?
(A
(B)
(C)
(D)
ce)
Price Level
Real GDP
Decrease
No change
lncrea e
Increa e
Increa e
Increase
Decrea e
No change
Decrea e
Increa e
59. Advocates of a monetary rule recommend
increa ing the money upply at a rate that i equal
to the rate of increa e in which of the following?
(A) Price level
(B) Unemployment rate
(C Levelofexport
Level of imports
(E) Long-run real gro domestic product
c•
Page13
Demand-SidePolicies:Monetary Policies-Questions
24. Which of the following action by the Federal
Re erve of the United tate increa e the money
upply?
(A Buying government bond on tl1e open
market
B Selling go ernment bond on the open
market
C Increa ing the re erve requirement
D Increa ing the di count rate
(E Increa ing the federal fund rate
Page14
Demand-SidePolicies:Monetary Policies-Questions
24. Which of the following action by the Federal
Re erve of the United tate increa e the money
upply?
(e
B
C
D
(E
Page15
Buying government bond on tl1e open
market
Selling go ernment bond on the open
market
Increa ing the re erve requirement
Increa ing the di count rate
Increa ing the federal fund rate
This is
Macroeconomics
-po\icJ!
rtbe Federa
In this chapter we will explain why central banks that are
independent from the government may bring about better
economic performance. We will examine the complexity of
the decision facing the monetary policymaker who is given the
independence to make policy decisions , and also consider
some policy tools policymakers have at their disposal. Finally,
we will look at how governments can choose to restrict their
monetary policymakers' freedom by choosing to tie the value
of their currency to that of another country's currency.
Page16
Whl'Are CentralBanksIndependent?
The most important feature of a central bank is the degree of
independence from the government that the law gives it. FED
officials are appointed to long terms that may span several
different Presidents; the four-year term of the chair of the FED
does not necessarily coincide with the term of any President.
Therefore, like Supreme Court justices in the United States, FED
officials develop an independence from governmental influence.
The main rationale for central bank independence is that an
independent central bank can prevent the government in power
from using monetary policy in ways that appear beneficial in the
short run but that can harm the economy in the long run.
However, accountability is still critical when it comes to central
banks to ensure that their actions aren't taken too far. Congress
and the FED often speed up, slow down, or stabilize the
economy by using fiscal and/or monetary policy. Actions by
Congress to stabilize the economy.
Page17
The Fed, the Banks,and the T,inkfromReservesto
Deposits
Governments, usually through a central bank, control the
supply of money. In the U.S., the central bank is the Federal
Reserve, nicknamed the "FED." A commercial bank , such as
Bank of America or Chase, is a firm that channels funds from
individual savers to investors by accepting deposits and
making loans. The desire for loans is determined by the real
interest rate, the lower the real interest rate, the more loans that
will be requested. Banks are commonly ref erred to as
financial intermediaries. Banks accept deposits and then lend
the funds to others and earn profits by charging an interest rate.
Page18
TheFED
The central bank of a country serves as the main bank to other
banks. In other words, commercial banks, like Chase of TD,
deposit funds at the central bank, and the central bank in turn
makes loans to other commercial banks, like Bank of America.
The FED was established as the central bank for the U.S. in
1913 and as of 2013 had over 21,000 employees spread all
over the country. Those who direct the FED are ref erred to as
the Federal Reserve Board, or Board of Governors. These
seven people are appointed to nonrenewable fourteen year
terms by the President and confirmed by the Senate. One of
the governors is appointed by the President as the Chairman of
the Board.
Page19
The DistrictFederalReserveBanks
The Federal Reserve system includes not only the Federal
Reserve Board in Washington but also twelve Federal Reserve
Banks in different districts around the country. The term
"FED" refers to the whole federal reserve system, including the
Board of Governors of the twelve district banks.
Page20
The FederalOpenMarketCommittee(FOMC)
The FED makes decisions about the supply of money through
a committee called the Federal Open Market Committee
(FOMC). The FOMC meets in Washington eight times a year
to decide how to implement monetary policy, such as deciding
whether to raise, lower, or keep interest rates steady. When
journalists in the press run a story about the FED, they usually
talk as if the chair has complete power over FED decisions.
Some view the chair of the FED as the most powerful person
in America, after the President.
Page21
FEDRegulationof Monetarl'Policy
The FED regulates the money supply by changing any one of
the fallowing: 1) open market operations by buying and
selling government bonds (short-term loans) from banks, 2)
lending money to banks at a discount rate, and 3) setting
reserve requirements or reserve ratios) on banks.
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)\)
FEDRegulationof Monetarl'Policy(cont.)
Open market operations occur when the FED buys or sells
government bonds (securities) from banks. This is the most
important and widely used monetary policy. To increase the money
supply, the FED buys government bonds (securities) from banks and
pay for the bonds by electronically increasing the banks' account
reserves at the FED (buy==bigger). Banks then have more money to
loan to borrowers which influences them to decrease their federal
funds rate (the short-term interest rate that banks charge one
another on overnight loans). This ultimately decreases the nominal
interest rate (the interest rate when inflation isn't taken into
account) and the real interest rate that borrowers pay. To decrease
the money supply, the FED sells government securities to banks
(sell==smaller). The FED then electronically decreases the banks'
account reserves at the FED, leaving the banks with less money to
lend out. Banks ultimately increase their federal funds rate between
banks and finally the nominal interest rate increases increasing the
real interest rate.
Page23
EED Ref!ulation of Monetarv Policy- Questions
6. When a central bank conduct open -market bond
ale the money upply ..intere t rate, and
aggregate demand will change in which of the
following ways in the hort run?
Money
Supply
(A) Decrease
(B) Decrease
(C) Decrease
(D) Increa e
(E) Increase
Interest Rate
Aggregate
Demand
Increa e
Decrease
Increa e
Decrease
Decrea e
Decrea e
Increa e
Increa e
Increa e
Decrea e
14. Which of the following i a monetary policy that
can be u ed to counteract a rece ion?
(A) Buying bond in the open market
(B) Increasing the di count rate
(C) Increasing the required re erve ratio
(D) Lowering tax rate
(E) Increasing government · pending
Page24
EED Ref!ulation of Monetarv Policy- Questions
6. When a central bank conduct open -market bond
ale the money upply ..intere t rate, and
aggregate demand will change in which of the
following ways in the hort run?
Money
Supply
(. ) Decrease
(B Decrease
(C) Decrease
(D) Increa e
(E) Increase
Interest Rate
Aggregate
Demand
Increa e
Decrease
Increa e
Decrease
Decrea e
Decrea e
Increa e
Increa e
Increa e
Decrea e
14. Which of the following i a monetary policy that
can be u ed to counteract a rece ion?
(e ) Buying bond in the open market
(B) Increasing the di count rate
(C) Increasing the required re erve ratio
(D) Lowering tax rate
(E) Increasing government · pending
Page25
FEDRe2ulationof MonetaryPolicy-Questions
38. If the central bank buys government bonds from
individuals on the open market and bank do not
loan out any exce s reserves created by the open
market purcha e, which of the fallowing will
happen?
(A) The money upply will increa se.
(B) The money upply will remain unchanged.
(C) Loan to the private ector will increa e.
(D) Demand deposit will decrea e.
(E) The level of actual re erve will decrease.
2. Open market operation take place when the
(A) central bank buy or ell tock
(B) central bank buy or ell government bond
(C) central bank increa e or decrea e the
di count rate to monitor the money supply
(D) central bank increase or decrea e re erve
requirements for depo itory in titution
(E commercial bank borrow re erve from the
central bank
Page26
FEDRe2ulationof MonetaryPolicy-Questions
38. If the central bank buys government bonds from
individuals on the open market and bank do not
loan out any exce s reserves created by the open
market purcha e, which of the fallowing will
happen?
ce) The money
(B)
(C)
(D)
(E)
upply will increa se.
The money upply will remain unchanged.
Loan to the private ector will increa e.
Demand deposit will decrea e.
The level of actual re erve will decrease.
2. Open market operation take place when the
(A) central bank buy or ell tock
central bank buy or ell government bond
(C) central bank increa e or decrea e the
di count rate to monitor the money supply
(D) central bank increase or decrea e re erve
requirements for depo itory in titution
(E commercial bank borrow re erve from the
central bank
e)
Page27
FED Regulation of Monetarl' Policy-Questions
37. If the central bank conduct an open-market
purcha e of bond , which of the following will
occur?
A The price of bond will increa e.
(B The money upply will decrea e.
(C Total bank re erve will decrea e.
(D Con umption will decrea .
E The go ernment will balance it budget
46. If aggregate demand i growing faster than longrun aggregate upply, the Federal Re erve i mo t
likely to
A
B
C
D
E
Page28
ell ecuritie on the open market
increa e bond price
increa e income taxe
decrea e the di count rate
decrea e the required re erve ratio
FED Regulation of Monetarl' Policy-Questions
37. If the central bank conduct an open-market
purcha e of bond , which of the following will
occur?
•
(B
(C
(D
E
The price of bond will increa e.
The money upply will decrea e.
Total bank re erve will decrea e.
Con umption will decrea .
The go ernment will balance it budget
46. If aggregate demand i growing faster than longrun aggregate upply, the Federal Re erve i mo t
likely to
•
B
C
D
E
Page29
ell ecuritie on the open market
increa e bond price
increa e income taxe
decrea e the di count rate
decrea e the required re erve ratio
FED Regulation of Monetarl' Policy-Questions
11. To reduce inflation , the central bank vvould be
mo t likely to
A decrea e the re erve requirernent
B decrea e the income tax rate
C) increa e the upply of rn ney
D) buy government ecuritie l
E ell oovernment ecuritie .
Page30
FED Regulation of Monetarl' Policy-Questions
11. To reduce inflation , the central bank vvould be
mo t likely to
A decrea e the re erve requirernent
B decrea e the income tax rate
C) increa e the upply of rn ney
D) buy government ecuritie l
ell oovernment ecuritie .
<•
Page31
FEDRegulationof Monetarl'Policy(cont.)
The 2nd instrument the FED uses to impact monetary policy is
the discount rate . This is the interest rate that the FED
charges commercial banks when loaning them money. For
example, if Bank of America needs $10 million, they could
borrow it from the U.S. Treasury (which the FED controls), but
they must pay it back with 3% interest. To increase the money
supply, the FED decreases the discount rate, making it cheaper
for banks to borrow money from them. To decrease the money
supply, the FED increases the discount rate to make it more
expensive for banks to borrow from them.
Page32
FEDRegulationof Monetarl'Policy(cont.)
The 3rd and last instrument the FED uses to impact monetary policy
is the reserve requirement or reserve ratio (deposits x reserve
ratio). This is the percent of deposits that banks must hold in reserve
at the FED and cannot loan out. The FED sets the amount, the ratio,
that banks must hold. If you have a bank account, where is your
money? Only a small percent of your money is held in reserve. The
rest of your money has been loaned out. This is called "Fractional
Reserve Banking." When the FED wants to increase the money
supply, the FED decreases the amount of money that banks must hold
in reserve. Banks then loan out the excess reserves to make money.
As more loans are created, more money flows into other banks
allowing other banks to keep making more loans, interest rates fall,
and AD increases. This process is called the money multiplier, and it
is the expansion of a country's money supply that results from banks
being able to lend. To decrease the money supply the FED simply
increases the reserve requirement or ratio. Excess reserves are
simply extra bank reserves at the FED.
Page33
FEDRegulationof Monetarl'Policy(cont.)
The money multiplier is of special importance to the FED. For
example, if a $10 million increase in reserves by the FED at
Chase is combind with a 10% (.1) reserve ratio, the money
multiplier is 10 and we get a $100 million increase in deposits .
A $10 million increase in reserves by the FED leads ultimately
to $100 million increase in available funds in the economy,
funds that will available to loan to customers. The opposite is
also true. A decrease in reserves occurs when the FED sells
bonds. A decrease in reserves of $10 million would lead to a
decrease in deposits of $100 dollars.
money _
1
- reserve
multiplier
ratio
Page34
FEDRegulationof Monetarl'Policy(cont.)
To calculate the financial impact of a bank's increase in their
reserves at the FED:
money _
1
- reserve
multiplier
ratio
*If the reserve requirement is .5% and the FED sells $10 million
of bonds: 1) what is the multiplier, 2) will happen to the money
supply, and 3) by how much?
1. multiplier= 2, 2. ms decreases, 3. $20 million
*If the reserve requirement is .1% and the FED buys $10 million
of bonds: 1) what is the multiplier, 2) will happen to the money
supply, and 3) by how much?
1. multiplier= 10, 2. ms increases, 3. $100 million
*If the FED decreases the reserve requirement from .50% to .20%,
what will happen to the money multiplier and by how much?
1. multiplier gets bigger, from 2 to 5
Page35
FEDRegulationof Monetarl'Policy-Questions
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S2
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- - - - - - - -
- - - - - -
Money
Demand
QUANTITY OF MONEY
16. In the United States , which event would ha ve
cau ed the hift of the money supply curve from
S 1 to S 2 in the money market shown above?
(A) The purch ase of gover nment bond on the
open market by the Federal Re serve
(B ) An incre ase in the required re serve ratio
(C) A hort -run increa se in output, employment
and income
(D ) An incre ase in general price level in the
United State
(E) An incre ase in the upply of dollar in foreign
exchange market
Page36
FEDRegulationof Monetarl'Policy-Questions
~ C,I.,l
{/) ~
~~
~
z
~
S1
S2
.
ll
.
12
- - - - - - - -
- - - - - -
Money
Demand
QUANTITY OF MONEY
16. In the United States , which event would ha ve
cau ed the hift of the money supply curve from
S 1 to S 2 in the money market shown above?
•
(B )
(C)
(D )
(E)
The purch ase of gover nment bond on the
open market by the Federal Re serve
An incre ase in the required re serve ratio
A hort -run increa se in output, employment
and income
An incre ase in general price level in the
United State
An incre ase in the upply of dollar in foreign
exchange market
Page37
FEDRegulationof Monetarl'Policy-Questions
60. A ume that the re erve requirement for demand
depo it i 20 percent that banks hold no exces
re erve , and that the public hold no currency.
If the central bank ells $10,000 worth of
government securitie to commercial bank , the
total money upply will
(A) increa e by $10 000
(B) increa e by $50,000
C) decrease by $10 000
(D) decrease by $50 000
(E notchange
48. If the re erve requirement i 10 percent and the
central bank ell $10 000 in government bonds
on the open market the money upply will
(A)
(B)
(C)
(D)
increa e by a maximum
increa e by a maximum
decrea e by a maximum
decrease by a maximum
(E) decrease by a maximum
Page38
of $9 000
of $90 000
of $9 000
of $10,000
of $100,000
FEDRegulationof Monetarl'Policy-Questions
60. A ume that the re erve requirement for demand
depo it i 20 percent that banks hold no exces
re erve , and that the public hold no currency.
If the central bank ells $10,000 worth of
government securitie to commercial bank , the
total money upply will
(A)
(B)
(C)
•
(E
increa e by $10 000
increa e by $50,000
decrease by $10 000
decrease by $50 000
notchange
48. If the re erve requirement i 10 percent and the
central bank ell $10 000 in government bonds
on the open market the money upply will
(A)
(B)
(C)
(D)
•
Page39
increa e by a maximum
increa e by a maximum
decrea e by a maximum
decrease by a maximum
decrease by a maximum
of $9 000
of $90 000
of $9 000
of $10,000
of $100,000
FEDRegulationof Monetarl'Policy-Questions
40. A commercial bank' ability to create money
depend on which of the following?
(A) The exi tence of a central bank
(B) A fractional reserve banking y tern
(C) Gold or ilver re erve backing up the
currency
(D) A large national debt
(E) The exi tence of both checking accounts
and avings account
46. A ume that the required reserve ratio i
10 percent bank keep no exce s reserve
and borrower depo it all loan made by bank .
Suppose you have aved $100 in cash at home
and decide to depo it it in your checking account.
A a result of your deposit the money upply can
increa e by a maximum of
$800
$900
(C) $1,000
(D) $1 100
(A)
(B)
(E $1,200
Page40
FEDRegulationof Monetarl'Policy-Questions
40. A commercial bank' ability to create money
depend on which of the following?
(A) The exi tence of a central bank
•
A fractional reserve banking y tern
(C) Gold or ilver re erve backing up the
currency
(D) A large national debt
(E) The exi tence of both checking accounts
and avings account
46. A ume that the required reserve ratio i
10 percent bank keep no exce s reserve
and borrower depo it all loan made by bank .
Suppose you have aved $100 in cash at home
and decide to depo it it in your checking account.
A a result of your deposit the money upply can
increa e by a maximum of
$800
•
$900
(C) $1,000
(D) $1 100
(A)
(E $1,200
Page41
FEDRe2ulationof MonetaryPolicy-Questions
40. If the central bank raises the required re erve
ratio , the money multiplier and the money upply
will change in which of the followin g way ?
(A)
(B)
(C)
(D)
(E)
Money Multiplier
Money Supply
Increa e
Increa se
Increa se
Decrease
Decrease
Increa e
Decre ase
No change
No change
Decre ase
7 . If the central bank hold interest rates con tant an
autonomou decrea e of $10 million in investment
pending! will most likely result in
(A) a decrea e of exactly $10 million in gros
domestic product
(B) a decrease of more than $10 million in gross
domestic product
(C) an increase of $10 million in taxe to offset
the decrea e in inve tment
(D) an increase of $10 million in aggregate
supply to offset the decrease in inve tment
(E) an increase in the co t of loan for investment
Page42
FEDRe2ulationof MonetaryPolicy-Questions
40. If the central bank raises the required re erve
ratio , the money multiplier and the money upply
will change in which of the followin g way ?
(A)
(B)
(C)
(D)
•
Money Multiplier
Money Supply
Increa e
Increa se
Increa se
Decrease
Decrease
Increa e
Decre ase
No change
No change
Decre ase
7 . If the central bank hold interest rates con tant an
autonomou decrea e of $10 million in investment
pending! will most likely result in
(A) a decrea e of exactly $10 million in gros
domestic product
(.
a decrease of more than $10 million in gross
domestic product
(C) an increase of $10 million in taxe to offset
the decrea e in inve tment
(D) an increase of $10 million in aggregate
supply to offset the decrease in inve tment
(E) an increase in the co t of loan for investment
Page43
FEDRegulationof Monetarl'Policy-Questions
15. If the required re erve ratio i 0.2, a $1 billion
increa e in bank re erve can lead to an increa e
in M 1 of at mo t
(A)
(B)
(C)
(D)
(E
$6 billion
$5 billion
$1 billion
$0.8 billion
$0.2 billion
33. A ume that the re erve requirement i
10 percent. Marwa depo it $1 million in ca h
into her checking account at Fir t Bank. The
depo it will initially increa e exce re erve at
First Bank by
(A)
(B)
(C)
(D)
(E)
Page44
$100,000
$900,000
$1 million
$9 million
$10 million
FEDRegulationof Monetarl'Policy-Questions
15. If the required re erve ratio i 0.2, a $1 billion
increa e in bank re erve can lead to an increa e
in M 1 of at mo t
(A) $6 billion
(. $5 billion
(C) $1 billion
(D) $0.8 billion
(E $0.2 billion
33. A ume that the re erve requirement i
10 percent. Marwa depo it $1 million in ca h
into her checking account at Fir t Bank. The
depo it will initially increa e exce re erve at
First Bank by
(A)
. )
(C)
(D)
(E)
Page45
$100,000
$900,000
$1 million
$9 million
$10 million