If the Banking System Has Demand Deposits of $100,000,total Reserves

question 43

Multiple Choice

If the banking system has demand deposits of $100,000,total reserves equal to $15,000,and a required reserve ratio of 10 percent,the banking system can increase the volume of loans by a maximum of

• A)$5,000.
• B)$50,000.
• C)$85,000.
• D)$100,000.

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Definitions:

Crowdfunding

Gathering small sums of money from many people to finance a project or endeavor, commonly done online.

Bootstrapping

A method where entrepreneurs start their company with minimal capital, relying on personal finances and revenue from the business rather than seeking external investment.

Formal Fundraising

involves organized efforts to gather financial contributions from individuals, organizations, or governments, typically for nonprofit organizations or specific causes.

Crowdsourcing

A technique of acquiring knowledge, thoughts, or content by appealing for contributions from an extensive group of individuals, often through the internet community.