Suppose That the Banking System Does NOT Hold Excess Reserves

question 61

Multiple Choice

Suppose that the banking system does NOT hold excess reserves and the reserve ratio is 25%. If Molly deposits $1,000 cash in her checking account, the banking system can increase the money supply by an additional:

• A) $5,000.
• B) $1,000.
• C) $3,000.
• D) $4.000.

---

Definitions:

Temporal Lobes

Brain regions involved in processing auditory information and are also key in the formation of memories.

Auditory Cortex

The region of the cerebral cortex that processes auditory information, located in the temporal lobes of the brain.

Motor Cortex

An area in the cerebral cortex focusing on the strategizing, oversight, and execution of movements performed willingly.

Somatosensory Cortex

A region of the brain located in the parietal lobe that processes sensory information from the body, including touch, temperature, and pain sensations.