C) eight D) twelve which is generally regarded as the most independent in the world be 27) The central bank which is generally re its charter cannot be changed by legislation is the A) Bank of England. B) Bank of Canada C) European Central Bank D) Bank of Japan 28) Of the three players in the money supply process, most observers agree that the most important player is A) the United States Treasury. It ulare B) the Federal Reserve System. C) the FDIC. D) the Office of Thrift Supervision. 29) When the Federal Reserve purchases a the banking system and th ne Federal Reserve purchases a government bond from a primary dealer, reserves in and the monetary base everything else held constant. A) increase increases B) increase; decreases C) decrease; increases D) decrease; decreases 30) There are two ways in which the Fed can provide additional reserves to the banking system: it can government bonds or it can discount loans to commercial banks. A) sell; extend B) sell; call in C) purchase; extend D) purchase, call in 31) If the required reserve ratio is 25 percent, the simple deposit multiplier is A) 5.0. B) 2.5. C) 4.0. D) 10.0. 32) In the simple deposit expansion model, if the required reserve ratio is 20 percent and the Fed increases reserves by 5100, checkable deposits can potentially expand by A) $100. B) $250. C) $500 D) $1,000 33) In the simple deposit expansion model, a decline in checkable deposits of $500 when the required reserve ratio is equal to 10 percent implies that the Fed A) sold 5500 in government bonds. B) sold $50 in government bonds. C) purchased $50 in government bonds