Refer to the Information Provided in Scenario 25

question 218

Multiple Choice

Refer to the information provided in Scenario 25.2 below to answer the question(s) that follow.
SCENARIO 25.2: 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 25.2. How much money will be created based on the initial $100,000 deposit?

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

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Definitions:

Resale Price Maintenance

A practice where manufacturers set a minimum price below which retailers are not allowed to sell their product, aiming to stabilize market prices and maintain brand image.

Cooperative Outcome

A result in decision-making where all parties work together to achieve a mutually beneficial solution, often in contrast to competitive or adversarial outcomes.

Oil Companies

Corporations that extract, produce, refine, or market oil and its derivative products.

Air Travel

The act of moving from one place to another through the atmosphere, typically in an airplane.