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

question 38

Multiple Choice

If the banking system has demand deposits of $100,000,total reserves equal to $20,000,and a required reserve ratio of 20 percent,the banking system can increase the volume of loans by

• A)$0.
• B)$20,000.
• C)$80,000.
• D)$100,000.

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Definitions:

Sociological Imagination

The ability to see the connections between personal experiences and larger social forces, a concept introduced by C. Wright Mills.

Origins

Refers to the beginning or source of something, often used in discussions about the origins of societies, ideas, or species in historical or evolutionary contexts.

Micro

Refers to small-scale or minute aspects of something, often used in scientific and economic contexts.

Macro

Referring to large-scale or overall system levels, often used in opposition to micro, which focuses on smaller, individual elements.