If the Required Reserve Ratio Is 0

question 100

Multiple Choice

If the required reserve ratio is 0.10, what is the maximum amount of money that can be created from a $2 million deposit in the banking system?

• A)$2 million
• B)$4 million
• C)$20 million
• D)$200 million

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Definitions:

Good Will

A will without ulterior motive, motivated solely by the intention to do one’s duty.

Selfishness

The act or practice of placing one's own needs or desires above the welfare of others.

Natural Tendency

An innate inclination or predilection towards a particular behavior or action.

Duty-Defined

Describes actions or behaviors dictated by obligations, responsibilities, or moral commitments.