Suppose That Initially a Bank Has Excess Reserves of $800

question 101

Multiple Choice

Suppose that initially a bank has excess reserves of $800 and the reserve ratio is 20%. Then Andy deposits $1,000 of cash in his checking account and the bank lends $600 to Molly. That bank can lend an additional:

• A) $200.
• B) $1,000.
• C) $800.
• D) $2,400.

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Definitions:

Event Manipulations

Techniques used to alter events or experiences in an experimental setting in order to examine their effects on the outcome.

Videotapes

A medium for recording and playing back visual and auditory information, traditionally using magnetic tape, although largely obsolete in the modern digital era.

Confederates

Individuals who act as part of a study's procedure but are secretly working with the researchers, often used in psychological experiments to manipulate social situations.

Staged Manipulation

The deliberate modification or control of variables in an experiment to investigate their effects on other variables.