Suppose That There Are No Excess Reserves in the Banking

question 40

Multiple Choice

Suppose that there are no excess reserves in the banking system and the current amount of demand deposits is $100,000. If the monetary authorities lower the required reserve ratio from 10% to 5%:

• A) the amount of excess reserves in the banking system will fall.
• B) the amount of excess reserves in the banking system will remain the same.
• C) the money-creating potential of the banking system will decline.
• D) the money-creating potential of the banking system will rise.

---

Definitions:

Rotate Photos

The process of turning photos to the desired orientation, usually done through image editing software.

Add Captions

The process of adding text labels or descriptions to visuals or multimedia to provide context or aid comprehension.

Artistic Effects

Artistic effects are digital filters or enhancements applied to images or graphics in software applications to create stylized or visually interesting results.

Brightness And Contrast

Settings that adjust the lightness (brightness) and the difference between the darkest and brightest parts (contrast) of an image or display to improve visibility and detail.