The Following Is Information About a Banking System: New Currency

question 165

Multiple Choice

The following is information about a banking system: new currency deposited in the system = $40 billion; desired reserve ratio = 20%; excess reserves prior to the new currency deposit = $0.Refer to the above information.The total demand deposit after the expansion of the money supply through loans is:

• A)$160 billion.
• B)$200 billion.
• C)$40 billion.
• D)$128 billion.

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Definitions:

Opportunity Cost

The monetary loss of relinquishing the best subsequent option upon deciding.

Bowed-out Production Possibility Frontier

A production possibility frontier that is concave to the origin, indicating increasing opportunity costs as production of one good is increased.

Guns

Firearms used for a range of purposes, including defense, hunting, sports, and as weapons in conflicts.

Value Judgments

Value judgments are assessments or opinions based on personal values, beliefs, or ethics, rather than on empirical evidence or objective criteria.