If the Required Reserve Ratio Is 10 Percent,currency in Circulation

question 13

Multiple Choice

If the required reserve ratio is 10 percent,currency in circulation is $400 billion,checkable deposits are $1,000 billion,and excess reserves total $1 billion,then the money supply is ________ billion.

• A)$10,000
• B)$4,000
• C)$1,400
• D)$10,400

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Definitions:

Standard Normal Random Variable

A random variable that is normally distributed with a mean of 0 and a standard deviation of 1.

P

Often used as shorthand for the p-value in statistical contexts, indicating the probability of observing certain results given a null hypothesis.

z

In statistics, 'z' often stands for the z-score, a measure of how many standard deviations an element is from the mean.

Standard Normal Random Variable

A random variable that follows a normal distribution with a mean of 0 and a standard deviation of 1.