Table 9-6: Deposit Expansion Stages

question 60

Multiple Choice

Table 9-6: Deposit Expansion Stages
In Table 9-6, assume that banks loan out 100% of their excess banking reserves, there are no cash withdrawals, and all loan proceeds are spent. Figures have been rounded up to the nearest whole number.
-Refer to Table 9-6. What is the value of $F (the total new checkable deposits) ?

• A) $1,000
• B) $4,000
• C) $5,000
• D) $6,000

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Definitions:

Rocky Mountains

A major mountain range in western North America, extending from Canada through the United States, known for its breathtaking landscapes and diverse ecosystems.

Transcontinental Railroad

A continuous rail line that connects the east and west coasts of the United States, completed in 1869, facilitating mass migration, goods transportation, and economic development.

Homestead Act

A United States federal law enacted in 1862 that granted 160 acres of public land to settlers for a small fee, assuming they would improve the land by building a dwelling and cultivating crops.

160 Acre Parcels

A reference to the Homestead Act of 1862 in the United States, which allowed settlers to claim 160 acres of public land in exchange for cultivating it for five years.