Suppose Bank a Holds $200 of Reserves, Has Deposits of $1000

question 245

Multiple Choice

Suppose Bank A holds $200 of reserves, has deposits of $1000, and the desired reserve ratio is 20 percent. How many deposits can Bank A create?

• A) zero, because Bank A has no excess reserves
• B) $850
• C) $200
• D) $50

Recognize the importance of intrinsic and extrinsic motivations in career success and personal fulfillment.

Acknowledge the role of economic factors and workplace policies in shaping professional outcomes and mental health.

Understand the impact of early isolation on language development.

Recognize the influence of cognitive biases on decision-making and judgment.

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Definitions:

Inverse Supply Curve

A representation of the relationship between the price of a good and its supply, showing how quantity supplied decreases as price decreases, contrary to the typical direct supply relationship.

Equation

A mathematical statement that asserts the equality of two expressions, typically represented by the symbol "=".

Straight Line

The shortest distance between two points without any curve or bend, often used in mathematical and geometric contexts.

Demand Curve

A graph representing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.