Refer to the Information Provided in Scenario 25

question 118

Multiple Choice

Refer to the information provided in Scenario 25.1 below to answer the question(s) that follow.
SCENARIO 25.1: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up.
-Refer to Scenario 25.1. Based on the initial $100,000 deposit, the money supply will, at most, expand to

• A) $1 million.
• B) $2 million.
• C) $16.67 million.
• D) $50 million.

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Definitions:

Action Potential

A temporary reversal of an electric membrane potential, which propagates along the membrane of a nerve cell or muscle cell.

Cerebrospinal Fluid

Clear fluid that surrounds the brain and spinal cord and fills ventricles within the brain.

Ventricles

Chambers of the heart that receive blood from the atria and pump it out to the lungs and the rest of the body.

Declarative Memories

A type of long-term memory that involves the conscious recall of facts and events.