Suppose the Banking System Currently Has $400 Billion in Reserves

question 114

Multiple Choice

Suppose the banking system currently has $400 billion in reserves, the reserve requirement is 8 percent, and excess reserves amount to $5 billion. What is the level of deposits?

• A)$5,000 billion
• B)$4,937.5 billion
• C)$5,062.5 billion
• D)$4,995 billion

Recognize the importance of environmental factors and community infrastructure in disease prevention.

Understand the historical development of public health initiatives and their impact on community health.

Analyze the role of government and non-governmental organizations in the advancement of public health.

Identify key figures and their contributions to public health and nursing.

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Definitions:

Marginal Tax Rate

The tax rate on the last unit of income.

Cost of Debt

The effective rate that a company pays on its current debt, often calculated by taking the average interest rate it pays on all of its debt instruments.

WACC

Weighted Average Cost of Capital, a measure used to estimate the average rate of return a company is expected to pay its securities holders.

Cost of Common Stock

The return required by equity investors given the risk of the investment in a company's common stock, often used as a component in calculating the cost of capital.