If the Desired Reserve Ratio Is Ten Percent, Currency in Circulation

question 144

Multiple Choice

If the desired reserve ratio is ten percent, currency in circulation is $400 billion, chequable deposits are $1000 billion, and excess reserves total $1 billion, then the monetary base is ________.

• A) $400 billion
• B) $401 billion
• C) $500 billion
• D) $501 billion

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Definitions:

Hierarchy of Needs

A theory proposed by Abraham Maslow outlining a five-tier model of human needs, from basic physiological needs to self-actualization, each level needing to be fulfilled before moving to the next.

Cognitive Needs

Mental requirements essential for the growth and development of an individual, such as knowledge, comprehension, and curiosity.

Overprotected

A situation where an individual is shielded excessively from potential risks or harms, possibly hindering their development or independence.

Self-Actualization

The process of realizing and fulfilling one's potential, talents, and capabilities, considered the highest level of psychological development in Maslow's hierarchy of needs.