Given a Required Reserve Ratio of 20 Percent for All

question 126

Multiple Choice

Given a required reserve ratio of 20 percent for all banks, total bank reserves of $300 billion could support maximum deposits of:

• A)$60 billion.
• B)$1,200 billion.
• C)$1,500 billion.
• D)$2,000 billion.

---

Definitions:

Gross National Product

The total value of all goods and services produced by a country's residents over a specific time period, including income from overseas investments.

Services Provided

The actions or activities carried out by a company or an individual to satisfy a customer's needs or wants.

Human Development Index

An index measuring three basic dimensions of human development: life expectancy, education, and per capita income indicators, used to rank countries into tiers of human development.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach, to assess the relative value of the currencies and the cost of living.