If All the Banks in the Banking System Collectively Have

question 46

Multiple Choice

If all the banks in the banking system collectively have $20 million in cash reserves and have a target reserve ratio of 20 percent, the maximum amount of deposits the banking system can support is

• A)$4 million.
• B)$40 million.
• C)$80 million.
• D)$100 million.
• E)$400 million.

---

Definitions:

Serotonin

A neurotransmitter that has various functions, including regulating mood, appetite, and sleep; implicated in feelings of well-being and happiness.

Anxiety

A feeling of worry, nervousness, or unease about something with an uncertain outcome, often reflecting a temporary state or a chronic condition.

Panic Disorder

A mental health condition characterized by recurrent, unexpected panic attacks and persistent concern or behavior changes related to the attacks.

Debilitating Fear

An extreme level of fear that significantly impairs one's ability to function normally in various aspects of life.