(Table) Consider the T-Account in the Table A) the Potential Money Multiplier and the Actual Money Multiplier

question 49

Multiple Choice

(Table) Consider the T-account in the table. If the reserve requirement is 20%, then: $$\begin{array} { | l | l | } \hline \text { Assets } & \text { Liabilities } \\\hline \$ 28,000 \text { (cash) } & \begin{array} { l } \$ 5,000 \text { (checking account } \\\text { balances) }\end{array} \\\hline \$ 42,000 \text { (loans) } & \$ 20,000 \text { (loan recipients' checking } \\& \text { account balances) }\\\hline \end{array}$$

• A) the potential money multiplier and the actual money multiplier are the same.
• B) the potential money multiplier is 50% larger than the actual money multiplier.
• C) the potential money multiplier is 20% smaller than the actual money multiplier.
• D) the actual money multiplier is 5.

---

Definitions:

Personal Documents

Written or digital materials that pertain to an individual's personal life, experiences, or history.

Anecdotal Information

Informal accounts or personal observations used as evidence but not scientifically proven.

Assessment Instruments

Tools and methods used to evaluate or measure specific traits, abilities, or knowledge in individuals.

Observation

The active acquisition of information from a primary source using the senses or instruments that extend the senses.