Use the Following Example to Answer the Following Questions

question 123

Multiple Choice

Use the following example to answer the following questions:
Imagine that Stella deposits $25,000 in currency (which she had been storing in her closet) into her checking account at the bank.Assume that this institution has a required reserve ratio of 25 percent.
-As a result of this deposit,what is the maximum amount in loans that can be made by all the banks in the banking system?

• A) $0
• B) $18,750
• C) $25,000
• D) $31,250
• E) $100,000

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Definitions:

WTO

The World Trade Organization, an international body that deals with the rules of trade between nations, aiming to ensure that trade flows as smoothly, predictably, and freely as possible.

Agricultural Commodities

Products derived from farming and agriculture that are traded, sold, and used as staples in food supply chains.

European Union

A political and economic union consisting of 27 European countries that have agreed to follow common economic, social, and security policies.

Domestic Currencies

The legal currencies in circulation within a specific country, used for the majority of financial transactions within that country.