If Reserves in the Banking System Increase by $100,then Checkable

question 152

Multiple Choice

If reserves in the banking system increase by $100,then checkable deposits will increase by $667 in the simple model of deposit creation when the required reserve ratio is

• A)0.01.
• B)0.05.
• C)0.15.
• D)0.20.

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Definitions:

Trade Deficit

An occurrence where the total value of a country's imports surpasses the value of its exports, creating a negative trade balance.

China

A country in East Asia, the world's most populous nation, with a long history, rich culture, and significant global economic influence.

Overall

Encompassing everything or in general; a term not specific to economics but often used to imply a holistic or comprehensive perspective.

Substantially

To a great or significant extent, often used to signify the importance, size, or degree of something.