If Reserves in the Banking System Increase by $200,then Checkable

question 3

Multiple Choice

If reserves in the banking system increase by $200,then checkable deposits will increase by $500 in the simple model of deposit creation when the required reserve ratio is

• A)0.04.
• B)0.25.
• C)0.40.
• D)0.50.

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Definitions:

Allocation of Resources

The process of distributing available resources among various competing needs or uses to achieve desired objectives.

Political Decision Making

The process by which governments and political groups determine policies, allocate resources, and make crucial societal choices.

Collective Decision Making

The process by which a group of individuals reach a decision collectively, often through discussion and consensus.

Economic Questions

Fundamental queries about how societies allocate scarce resources among competing uses, typically including what to produce, how to produce, and for whom to produce.