Suppose a Chartered Banking System Has $100,000 of Outstanding Demand

question 191

Multiple Choice

Suppose a chartered banking system has $100,000 of outstanding demand deposits and actual cash reserves of $35,000.If the desired reserve ratio is 20 percent, the banking system can expand the supply of money by the maximum amount of:

• A)$122,000
• B)$175,000
• C)$300,000
• D)$75,000

---

Definitions:

Vagueness

The quality of being unclear, imprecise, or lacking in detail, often leading to ambiguity or misunderstanding.

Lexical Definitions

Explanations of the meanings of words or phrases as they are used in a particular language, focusing on their denotation rather than connotation.

Interpret

To explain the meaning of information, words, or actions.

Communications

The process of transmitting information, ideas, emotions, skills, and knowledge by using symbols, words, pictures, figures, and graphs.