If Reserves in the Banking System Increase by $200, Then

question 45

Multiple Choice

If reserves in the banking system increase by $200, then chequable deposits will increase by $500 in the simple model of deposit creation when the desired reserve ratio is ________.

• A) 0.04
• B) 0.25
• C) 0.40
• D) 0.50

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Definitions:

Tiki

A Marquesas Islands (Polynesia) three-dimensional carving of an exalted, deified ancestor figure.

Marquesas Islands

A group of volcanic islands in French Polynesia, known for their rugged terrain, rich culture, and significant anthropological interest.

Ivi P'o

Hollow, cylindrical bone or ivory ornaments produced in the Marquesas Islands (Polynesia).

Pigment Holders

Tools or containers used to store pigments, which are materials that give color to paint, ink, plastic, fabric, cosmetics, food, and other materials.