Suppose a commercial banking system has $100,000 of outstanding checkable deposits and actual reserves of $35,000. If the reserve ratio is 20 percent, the banking system can expand the supply of money by the maximum amount of:
A. $300,000.
B. $175,000.
C. $122,000.
D. $75,000.
Answer: D
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Professor's economics students are constructing models for how gasoline prices change. Maria's model has very realistic assumptions and is quite complex. Anna's model is less complicated and less realistic
Maria's model correctly predicts gas price increases 5% of the time. Anna's model predicts correctly 15% of the time. On the basis of usefulness or "goodness," Professor will give which student's model the higher grade and why? A) Maria's model gets the higher grade because it is more complex. B) Anna's model gets the higher grade because it is simpler. C) Maria's model gets the higher grade because it is more realistic. D) Anna's model gets the higher grade because it predicts accurately more often.
Explain how a higher rate of return on saving could, at least in theory, lead to lower saving
What is produced and exchanged in the real sector?
A. Money B. Financial assets C. All assets with a money price D. Goods and services
An example of a monopoly based on control of a key resource is
A) Major League Baseball. B) NASA. C) Microsoft's Windows operating system. D) the U.S. Food and Drug Administration.