Table 9-6: Deposit Expansion Stages

question 197

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. New loans made in Stage 1($C) amount to

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

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Definitions:

Actual Purchase

Actual purchase refers to the completion of buying goods or services, marking a finalized transaction.

Close Customer Contact

A business strategy emphasizing direct and frequent interaction with customers to tailor services or products to their needs.

Formal

Relating to official, regulated, or structured situations, often characterized by established rules or customs.

Intense

Of extreme force, degree, or strength; having or showing strong feelings or opinions.