The Maximum Increase in the Money Supply Possible from a Deposit

question 99

Multiple Choice

The maximum increase in the money supply possible from a deposit of $D into the banking system where R is the reserve requirement is

• A)(1 / R)(D − R).
• B)R × D.
• C)(1 / R)(1 − R)D.
• D)(1 / R)D.

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Definitions:

Ethical Action

Conduct or decisions made based on moral principles and values, typically reflecting what is considered right or acceptable behavior.

Corporate Governance

The system of rules, practices, and processes by which a company is directed and controlled, focusing on balancing the interests of its various stakeholders.

Corporate Responsibility

The ethical and moral obligation of companies to consider the impacts of their activities on stakeholders and the environment.

Shareholder Theory

The belief that the primary responsibility of a corporation is to maximize the wealth of its shareholders.