Table 9-6: Deposit Expansion Stages

question 118

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 $A in stage 1?

• A) $100
• B) $200
• C) $600
• D) $800

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Definitions:

Supremacy Clause

A clause in the U.S. Constitution declaring that federal law takes precedence over state law when the two are in conflict.

Preempts

Refers to the legal principle that federal law takes precedence over state laws in areas where the federal government has been granted authority.

Equal Protection

A constitutional principle in the United States that requires states to govern impartially, not discriminating between individuals or groups particularly in rights and responsibilities.

Fourteenth Amendment

An amendment to the U.S. Constitution that grants citizenship to all persons born or naturalized in the United States and prohibits states from denying any person equal protection under the law.