Assume the Required Reserve Ratio Is 16

question 19

Multiple Choice

Assume the required reserve ratio is 16.67 percent and that the commercial banking system has $110 million in excess reserves.The maximum amount of new money that the banking system could create is about

• A)$110 million.
• B)$330 million.
• C)$660 million.
• D)$1,353 million.

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Definitions:

Animals

Living organisms that typically have sensory organs, the ability to move, and the necessity to consume organic substances for survival.

Utilitarian Analysis

An assessment method grounded in utilitarianism, evaluating actions based on their consequences for the overall happiness or well-being.

Rights

Charter of entitlements and freedoms guaranteed to individuals, often protected by law.

Utilitarian Principle

A philosophical concept that actions are right if they are useful or for the benefit of the majority.