If All the Banks in the Banking System Collectively Have

question 64

Multiple Choice

If all the banks in the banking system collectively have $500 million in cash reserves,and have a target reserve ratio of 5%,the maximum amount of deposits the banking system can support is

• A)$10 million.
• B)$100 million.
• C)$25 billion.
• D)$100 billion.
• E)$10 billion.

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Definitions:

Retain Information

The ability to maintain and keep information in memory over time.

Memory

The cognitive process involving the encoding, storing, and retrieving of information experienced or learned.

Encoding Failure

an inability to properly store information into long-term memory, leading to the absence of memory recall.

Recall

The mental process of retrieving information from the past, which can vary in ease depending on several factors like recency and relevance.