Use the Following to Answer Questions

question 7

Multiple Choice

Use the following to answer questions:
-(Scenario: Assets and Liabilities of the Banking System) Refer to Scenario: Assets and Liabilities of the Banking System. If the reserve ratio is 6% and the banking system does NOT want to hold excess reserves, how much more can be added to the money supply?

• A) about $667,000
• B) about $111,000
• C) $250,000
• D) $1 million

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Definitions:

Probability

A measure of the likelihood that a certain event will occur, often expressed as a number between 0 and 1, where 0 means impossibility and 1 signifies certainty.

Fraudulent Use

The wrongful or criminal deception intended to result in financial or personal gain by using something in a dishonest way.

Credit Cards

Payment cards issued by financial institutions that allow cardholders to borrow funds with which to pay for goods and services with the promise to repay the loan along with any agreed-upon fees.

Unauthorized Individuals

Persons who do not have official permission to access certain information, facilities, or systems, posing a potential security risk.