If the Target Reserve Ratio in the Banking System Is

question 2

Multiple Choice

If the target reserve ratio in the banking system is 1%,there is no cash drain,and there are no excess reserves,a new deposit of $1 will lead to an expansion of the money supply of

• A)$0.01.
• B)$1.10.
• C)$1.00.
• D)$10.00.
• E)$100.00.

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Definitions:

Commercial Unit

A term used in sales law referring to a standard or unit of goods that is regarded as a single whole for purposes of sale and division.

Accept Goods

The act of receiving or taking delivery of goods in a manner that conforms with the terms of a contract.

Nonconformity

A deviation or failure to meet specified standards, often relating to quality or performance in products or services.

Replace Defective

The process of substituting goods or services that are flawed or do not meet the contractual specifications.